CAIIB · Advanced Bank Management · Module A — Statistics
CAIIB ABM Unit 7 — Estimation: Free MCQs with Explanations
By Swarnakshi Jha (ex-banker) · Updated 29 October 2026 · Paper I of the December 2026 cycle (Sunday 6 December 2026)
This is the free practice page for CAIIB ABM Unit 7 — Estimation (Module A — Statistics). The CAIIB Mock Centre holds 112 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five practice questions with explanations, and the traps that cost marks.
ABM · Module A112 MCQs in the Mock Centre5 free belowPaper on 6 December
Key facts examiners test from this unit
Estimation, estimators and their qualities — inference uses a sample statistic to judge an unknown population parameter, by a point estimate (one number) or an interval estimate (a range with a probability), and a good estimator is unbiased, efficient, consistent and sufficient.
Point estimates — estimate μ by x̄ = Σx ÷ n, σ² by s² = Σ(x − x̄)² ÷ (n − 1), σ by s, and p by p̄ = successes ÷ n.
Interval estimates and confidence intervals — the standard error σ ÷ √n measures how much sample means vary; the interval x̄ ± zσx̄ contains μ with the chosen confidence, and higher confidence means a wider interval.
5 free practice questions — tap an option
Five practice questions from this unit. Answers lock on the first tap, exactly as in the exam, and an explanation opens underneath. The Mock Centre has all 112 questions on this unit, from easy to tough, with caselets and key-in numericals, why every other option is wrong and the exam tip — and tracks your score and revision dates.
Question 1 of 5
A branch reports that a sample of 100 savings accounts has a mean balance of ₹42,000. Head office asks it to report '₹42,000 ± ₹1,500 at 95% confidence' instead. What does the second form add?
Why (c): A point estimate is a single value with no measure of its likely error; the interval adds a margin (±₹1,500) and a confidence level: intervals built this way contain the true mean 95 times in 100. It describes the mean, not individual accounts. (a) is wrong: The interval describes the mean, not individual accounts, so it does not say that 95% of balances lie in it. (b) is wrong: An interval measures sampling error; it does not remove it. (d) is wrong: Unbiasedness is a property of the estimator, not of how it is reported.
Question 2 of 5
The mean odometer reading of a sample of used taxis is 98,000 miles, and this figure is used for the whole fleet. What is 98,000 miles?
Why (d): 98,000 miles is the specific value of the estimator (the sample mean) in this sample, so it is an estimate (the textbook's example). (a) is wrong: A standard error measures the spread of an estimator. (b) is wrong: The estimator is the sample mean itself, the rule that produced 98,000. (c) is wrong: The fleet's true mean is unknown; 98,000 only estimates it.
Question 3 of 5
Which formula gives the unbiased point estimate of the population variance?
Why (a): The textbook notes that dividing by n gives some bias, while dividing by n − 1 makes s² an unbiased estimator of the population variance. (b) is wrong: Divisor n gives a biased (too small) estimate. (c) is wrong: N + 1 makes the bias worse. (d) is wrong: It omits subtracting the mean.
Question 4 of 5
To be 99 per cent confident, how many standard errors must the interval extend on each side of x̄?
Why (d): ±2.58 standard errors covers about 99% of the area (0.4951 on each side). (a) is wrong: 3 gives 99.7%. (b) is wrong: 2.33 gives 98%. (c) is wrong: 1.96 gives 95%.
Question 5 of 5
What is the finite population multiplier?
Why (a): The standard error is multiplied by √((N − n) ÷ (N − 1)) when sampling from a finite population. (b) is wrong: The denominator is N − 1, not N. (c) is wrong: The square root is missing. (d) is wrong: √(n ÷ N) is not the correction factor.
0 of 5 answered.
Traps in this unit
Calling the number the estimator.
Confusing efficiency with consistency.
A biased estimator that centres on the wrong value cannot be consistent.
Practise all 112 questions on Unit 7. The free CAIIB demo opens Units 1–2 of every paper with full explanations; the ABM Online Mock Centre unlocks all 4,600+ ABM questions, the full-length papers with caselets and key-ins, module mocks and Smart Revision for 18 months (₹1,499).
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