7. Estimation and Inference

Question 1

Central limit theorem

Answer 1

The central limit theorem says that the sampling distribution of the mean will always be normally distributed, as long as the sample size is large enough.

Question 2

Cluster sampling

Answer 2

A procedure that divides a population into subpopulation groups (clusters) representative of the population and then randomly draws certain clusters to form a sample.

Question 3

Convenience sampling

Answer 3

A procedure of selecting an element from a population on the basis of whether or not it is accessible to a researcher or how easy it is for a researcher to access the element.

Question 4

Indexing

Answer 4

An investment strategy in which an investor constructs a portfolio to mirror the performance of a specified index.

Question 5

Jackknife

Answer 5

A resampling method that repeatedly draws samples by taking the original observed data sample and leaving out one observation at a time (without replacement) from the set.

Question 6

Judgmental sampling

Answer 6

A procedure of selectively handpicking elements from the population based on a researcher’s knowledge and professional judgment.

Question 7

Non-probability sampling

Answer 7

A sampling plan dependent on factors other than probability considerations, such as a sampler’s judgment or the convenience to access data.

Question 8

Parameter

Answer 8

A descriptive measure computed from or used to describe a population of data, conventionally represented by Greek letters.

Question 9

Probability sampling

Answer 9

A sampling plan that allows every member of the population to have an equal chance of being selected.

Question 10

Sampling distribution

Answer 10

The distribution of all distinct possible values that a statistic can assume when computed from samples of the same size randomly drawn from the same population.

Question 11

Sampling error

Answer 11

The difference between the observed value of a statistic and the estimate resulting from using subsets of the population.

Question 12

Sampling plan

Answer 12

The set of rules used to select a sample.

Question 13

Simple random sample

Answer 13

A subset of a larger population created in such a way that each element of the population has an equal probability of being selected to the subset.

Question 14

Stratified random sampling

Answer 14

A procedure that first divides a population into subpopulations (strata) based on classification criteria and then randomly draws samples from each stratum in sizes proportional to that of each stratum in the population.