Sampling and Estimation

Question 1

the set of rules used to select a sample

Answer 1

sampling plan

Question 2

With _______, we select every kth member until we have a sample of the desired size.

Answer 2

systematic sampling

Question 3

Any difference between the sample mean and the population mean is
called _______ .

Answer 3

sampling error

Question 4

the average return in excess of the risk- free rate

divided by the standard deviation of returns

Answer 4

The Sharpe ratio

Question 5

The ___________ allows us to make quite precise probability statements
about the population mean by using the sample mean, whatever the distribution of
the population (so long as it has finite variance), because the sample mean follows
an approximate normal distribution for large- size samples.

Answer 5

central limit theorem

Question 6

The formulas that we
use to compute the sample mean and all the other sample statistics are examples of
estimation formulas or __________.

Answer 6

estimators

Question 7

To take the example of the mean, the calculated value of the sample mean in a given sample, used as an estimate of the population mean, is called a _________ of the population mean.

Answer 7

point estimate

Question 8

An ________ estimator is one whose expected
value (the mean of its sampling distribution) equals the parameter it is intended
to estimate.

Answer 8

unbiased

Question 9

An unbiased estimator is _______ if no other unbiased estimator of the same parameter has a sampling distribution with smaller
variance.

Answer 9

efficient

Question 10

A _______ estimator is one for which the probability of estimates close to the value of the population parameter increases as
sample size increases.

Answer 10

consistent

Question 11

A ___________ is a range for which one can assert with a given probability 1 − α, called the ____________, that it will contain the parameter it is intended to estimate. This interval is often referred to as the 100(1 − α)% confidence interval for the parameter

Answer 11

confidence interval, degree of confidence

Question 12

_________ relates to overuse of the same or related data.

Answer 12

Data mining

Question 13

When data availability

leads to certain assets being excluded from the analysis, we call the resulting problem ____________.

Answer 13

sample selection bias

Question 14

A test design is subject to ______________ if it uses information that was not available on the test date.

Answer 14

look- ahead bias

Question 15

A test design is subject to __________ if it is based on a time period that may
make the results time- period specific.

Answer 15

time- period bias

Question 16

The standard deviation or standard error of the sample mean is

Answer 16

σ/srq(n)

Question 17

A For a 99 percent confidence interval, the reliability factor we use with the t-distribution is

Answer 17

0.005

Question 18

In tests concerning the variance of a single, normally distributed population, the test statistic is _________

Answer 18

chi-square (χ2) with n − 1 degrees of freedom, where n is sample size.

Question 19

Test for equality of variances of two normally distributed populations.

Answer 19

F-statistic

The F-statistic is defined by the numerator and denominator degrees of freedom. The numerator degrees of freedom (number of observations in the sample minus 1) is the divisor used in calculating the sample variance in the numerator. The denominator degrees of freedom (number of observations in the sample minus 1) is the divisor used in calculating the sample variance in the denominator. In forming an F-test, a convention is to use the larger of the two ratios, as the actual test statistic.

Question 20

Type I error

Answer 20

False negative

Question 21

Type II error

Answer 21

False positive

Question 22

The value of a test statistic is best described as the basis for deciding whether to:

A reject the null hypothesis.
B accept the null hypothesis.
C reject the alternative hypothesis

Answer 22

A

Question 23

When samples are dependent, a ________________ is appropriate to conduct tests of the differences in dependent
items.

Answer 23

paired

comparisons test

Question 24

A pooled estimator is used when testing a hypothesis concerning the:
A equality of the variances of two normally distributed populations.
B difference between the means of two at least approximately normally distributed populations with unknown but assumed equal variances.
C difference between the means of two at least approximately normally distributed populations with unknown and assumed unequal variances

Answer 24

B

Question 25

The smaller the p-value, the ______ the evidence is against the null
hypothesis and in favor of the alternative hypothesis.

Answer 25

stronger