Sampling Error

Like many other errors that occur while conducting financial analysis and financial calculations a sampling error is an error that is exposed within a sample on which the analyst is working rather than working on the entire population for the sake of observation. Using samples for the analysis and observation may raise a point that they will result in the rising of the errors and will not yield the accurate result that will be termed as an accurate outcome if the entire population or the entire information is used to take observations rather than using a small part of the population that is called a sample.

However the use of the entire population is not advisable as it is very much time consuming and require a lot of resources including monetary resources as well. On the other hand a sample is small parts that represent the entire population. It is easy to conduct analysis on the samples moreover comparatively less resources are required to conduct observation on the sample as compared to conducting the tests for the observations over the entire population. It is true that there may be some different between the population analysis and the sample analysis however these differences are not much substantial as a result there will be no effect on the observation data. There are a number of methods that can be used to reduce sampling error that may involve the increase in the sample size and making it sure that the sample represents the entire stock of the population.

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