Quants 3 ( Hypothetical testing)

akashbachhawat
Posts: 2
Joined: Fri Mar 29, 2013 11:37 am

Quants 3 ( Hypothetical testing)

Postby akashbachhawat » Fri Mar 29, 2013 11:45 am

While dealing with a two-tailed test,given the sample mean and the sampling distribution ,the logic should be to see if the hypothesized mean is inside the confidence interval assuming the sample mean as the best estimate of the population mean,and if it is not then the hypothesized mean ,i.e the null hypothsis is rejected,BUT Y ARE WE TAKING THE HYPOTHESIZED MEAN AS THE AS THE STANDARD AND COMPARING IT WITH THE SAMPLING MEAN TO SEE IF THE SAMPLING MEAN IS OUTSIDE THE CONFIDENCE INTERVAL??????
I MEAN PLSE TELL ME THE LOGIC BEHIND COMPARING THE HYPOTHESIZED MEAN WITH THE SAMPLE MEAN AND NOT THE SAMPLE MEAN (AS THE STANDARD) WITH THE HYPOTHESIZED MEAN.??

content.pristine
Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

Quants 3 ( Hypothetical testing)

Postby content.pristine » Thu Apr 04, 2013 2:36 pm

Dear Akash,
To answer this question, you need a solid understanding of the central limit theorem.
Search the net as to how central limit theorem is actually derived.
I feel that your usual supplementary study material did not cover it in depth.


Return to “CFA Level I”



cron

Disclaimer

Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to abuse@edupristine.com and we will rectify it.