CAIIB · ABM · Chapter 7

Estimation

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.

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Q

What is estimation in banking statistics?

A

Using sample statistics to infer unknown population parameters when full census is impractical.

Q

Distinguish population parameter from sample statistic.

A

Parameter: fixed unknown measure of population (μ, p, σ). Statistic: computed measure from sample (x̄, p̂, s).

Q

What is the difference between estimator and estimate?

A

Estimator is formula/method; estimate is specific numerical value from applying estimator to a sample.

Q

Name the four criteria for a good estimator (BCES).

A

Bias-free (Unbiased), Consistent, Efficient, Sufficient.

Q

Why use (n−1) divisor in sample variance formula?

A

Using (n−1) makes sample variance s² an unbiased estimator of population variance σ².

Q

Differentiate point estimate from interval estimate.

A

Point: single value. Interval: range with LCL, UCL, and stated confidence level.

Q

How do confidence level and interval width relate?

A

Direct relationship: higher confidence level produces wider interval; lower level produces narrower interval.

Q

Define standard error of the mean.

A

Standard deviation of sampling distribution; measures typical fluctuation of sample statistic across samples.

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