T distribution
A symmetric distribution like the normal but with fatter tails, shaped by its degrees of freedom. Used for inference about a mean when the population variance is unknown, and it approaches the normal as the sample grows.
Where you will meet it
T distribution appears in 3 learning outcomes on the CFA syllabus. A few of them:
- Explain the chi-square, F and Student's t distributions
“Student's t distribution is symmetric like the normal but with fatter tails, governed by its degrees of freedom; it converges on the normal as those grow, and is the right distribution for inference about a mean when the population standard deviation is unknown.”
- Choose the right test for a hypothesis concerning a mean
“For large samples the two converge, because the t distribution approaches the normal.”
- Explain how a correlation coefficient is tested
“The null is that the population correlation is zero, and the test statistic follows a t distribution with n - 2 degrees of freedom.”
See also
Practise it
Practise t distribution until it is automatic: questions that explain every wrong option.
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