Question

An estimator is_________ if the variance of the estimator is the smallest among all unbiased estimators of the parameter that it's estimating.

A. Efficient
B. Normally Distributed
C. Unbiased
D. Consistent

Answer 1

Correct answer is (A). Efficient

Explanation:

The lower the variance of an estimator, the higher its accuracy and efficiency because variance measure how far a set of data spread out. So the quality of an estimator among unbiased estimator depends on the one with smallest variance.