Ch 5: Miller Study Notes, Pg 79

[Dr. Jayanthi Sankaran]

Hi David,

In the problem below:

Sample mean $22.64
Sample standard deviation $18.14
Sample size (n) 200
Standard error 1.28
Confidence 95%
Critical t 1.972
Lower limit $20.11
Upper limit $25.17

I don't understand how you get the critical t value to be 1.972. Critical t at 95% two-tailed turns out to be 1.96 (the same as one would expect from the critical Z value).

Would be grateful if you would elaborate

Thanks!
Jayanthi

 

[Deepak Chitnis]

Hi @Jayanthi Sankaran, 1.9720 is the critical value of 199 df 95% two tail, usually you dont find the that big students t table(just get it from internet), and 1.96 is the 95% two tail value of z stat, David is showing here a t stat example, hope that helps.
Thank you!

 

[ShaktiRathore]

Hi
The critical t value do turn out to be 1.972,here u take df=200-1=199,and confidence percent=95%,i tried it out in excel as function =T.INV(97.5%,198)=1.972 ,as excel gives critical value for 1 tail i used the confidence percent=97.5%.

 

[Dr. Jayanthi Sankaran]

Hi @Deepak Chitnis and Shakti,

At n = 200, I would expect the t distribution to be a normal distribution. And that is why, I think the Z statistic at 95% confidence = 1.96 should be used. Maybe, David can elaborate

Thanks!
Jayanthi

 

[Deepak Chitnis]

Hi @Jayanthi Sankaran, As you can see n=200, but we have sample volatility, as you know we use z stat when sample size n>30, but we also need the population variance/volatility. In this case we have sample volatility so we can us z or t stat but in practice we always tend to use t stat and as sample size increases t star approaches to normal or z stat. And by logically in this example David is showing t stat confidence level (how to calculate is), so that is why I think he used the t distribution and 199 df. Hope that helps. David can elaborate more.
Thank you!

 

[Dr. Jayanthi Sankaran]

That's a great point @Deepak Chitnis - I now get it. No information regarding population variance is what cuts it

Thanks!

 

[puneet_]

hi, i can not find study notes for miller section - Miller, Chapters 2, 3, 4, 6 & 7. where can i find notes? please help

 

[brian.field]

See this:

https://forum.bionicturtle.com/threads/study-notes-miller-chapters-2-3-4-6-7.9199/#post-39257

 

[puneet_]

Thanks Brian. I am new to these forums. I am going through some old forums now. it seems Jayanthi might be referring to last year's notes or some other material.

 

[brian.field]

That is right @S666! @David Harper CFA FRM and team are updating last year's notes although I would suggest that BT make previous year's notes available to subscribers!

Brian

 

[brian.field]

To clarify, I don't understand why BT doesn't make previous year's materials available to subscribers, particularly, if the readings continued from one year to the next, as is the case with the Miller readings. For example, there were notes for Miller's chapters in the 2015 curriculum, so they should be made available while being updated.

That being said, I believe that BT typically does this.....the fact that they are not doing this in this particular 2015-2016 transition may be due to the fact that BT's website was just updated. Moreover, they may be changing the formatting of the notes and questions sets given the new site format. I am not sure what the reason but I am sure that there is a reasonable explanation! BT is the best!

 

[Nicole Seaman]

Hello @brian.field

You are correct that we always make the previous year's materials available until we have the new materials prepared. We transferred over almost all of the materials from last year as long as they were relevant to the 2016 exam and if there were not a lot of changes. There are changes that need to be made in the Miller document so that will be republished in January as a fresh document.

Thank you,

Nicole

 

[brian.field]

Ooops! I think I wrote @S666 and I meant @S999.

Interesting that two members chose these names....

 

[S666]

@brian.field i chuckled to myself too when I saw his username....I've used S666 across multiple forums for years, and now it seems I've found an "upside down" me