1215

When sampling from a nonnormal distribution with an known variance, which statistic should be used if the sample size is large and if the respective sample size is small?

A) z-statistic; z-statistic.

B) z-statistic; not available.

C) t-statistic; t-statistic.

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When you are sampling from a:	and the sample size is small, use a:	and the sample size is large, use a:
Normal distribution with a known variance	z-statistic	z-statistic
Normal distribution with an unknown variance	t-statistic	t-statistic*
Nonnormal distribution with a known variance	not available	z-statistic
Nonnormal distribution with an unknown variance	not available	t-statistic*

*The z-statistic is theoretically acceptable here, but use of the t-statistic is more conservative.

1215

Which of the following statements about sample statistics is least accurate?

A) The z-statistic is used to test normally distributed data with a known variance, whether testing a large or a small sample.

B) The z-statistic is used for nonnormal distributions with known variance, but only for large samples.

C) There is no sample statistic for non-normal distributions with unknown variance for either small or large samples.

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There is no sample statistic for non-normal distributions with unknown variance for small samples, but the t-statistic is used when the sample size is large.

1215

Studies of performance of a sample of mutual fund managers most likely suffer from:

A) sample-selection bias.

B) survivorship bias.

C) look-ahead bias.

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Studies of the performance of mutual fund managers often suffer from survivorship bias as poorly performing funds are closed down and are not included in the sample.