Peter Biggs wants to know how growth managers performed last year. Biggs assumes that the population cross-sectional standard deviation of growth manager returns is 6 percent and that the returns are independent across managers.
A. How large a random sample does Biggs need if he wants the standard deviation of the sample means to be 1 percent?
B. How large a random sample does Biggs need if he wants the standard deviation of the sample means to be 0.25 percent?