CAIIB · ABM

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 the difference between a parameter and a statistic in the context of estimation?

A

A parameter is a numerical measure that describes a characteristic of a population, while a statistic is a numerical measure computed from a sample and used to estimate the parameter.

Q

What is a least squares estimator?

A

Estimator minimizing sum of squared deviations from observed values.

Q

What is point estimation in statistics?

A

Point estimation is the process of using a single value, called a point estimate, computed from sample data to estimate an unknown population parameter.

Q

What is the difference between an estimator and an estimate?

A

Estimator is a rule or formula; estimate is its numerical value.

Q

What is interval estimation and how does it differ from point estimation?

A

Interval estimation provides a range of values (confidence interval) within which the population parameter is expected to lie, unlike point estimation which gives a single value and conveys no information about precision.

Q

What is the sampling distribution of a statistic?

A

Probability distribution of a statistic computed from repeated samples.

Q

What is a confidence interval?

A

A confidence interval is a range of values, derived from sample data, that is likely to contain the true population parameter with a specified level of confidence (e.g., 95% or 99%).

Q

What is a 99% confidence interval compared to a 95% confidence interval?

A

99% interval is wider, providing higher certainty but less precision.

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