Statistical Sample Definition and Quiz

1. Define - Define a Statistical Sample for investments.
2. Context - Use Stastical Sample in a sentence.
3. Quiz - Test yourself.

by Paul Alan Davis, CFA

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Understanding Statistical Samples for Investments

Beginner

Statistical Sample refers to a subset of a population to be studied. In Finance, and particularly investments, the population is rarely known, so sampling techniques are used to make a best guess estimate about a population.

Synonym: sample, replicate

For context, the size of the sample is an important aspect of any empirical study for the analyst to make inferences about a population.

There are several ways an investment analyst can select the appropriate sample size, including using a target variance for an estimate, the power of the statistical test and the confidence level desired. Also, making estimates about a proportion, mean, for hypothesis testing requires different procedures.

Sometimes as a rule of thumb, with investments, analysts will require a sample size of 30, or 60 observations.

In a Sentence

Guy:  Yeah...but none of my past three employers complained about my social skills.
Eve:  Now that's not a verg big statistical sample Guy. You should be the first to acknowledge that.

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Related Terms

Our trained humans found other terms in the category statistical distributions you may find helpful.

• Normal Distribution
• Population
• Population Parameter
• Sample Statistic
• Z-Score

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