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You are reading the 2026 curriculum (exams up to November 2026). Sitting in February 2027 or later? Go to the 2027 Quantitative Methods guide.

Bootstrap and jackknife: resampling to estimate a standard error

Resampling builds many new samples out of the one you have and recomputes the statistic each time; the spread of the results estimates its standard error. The bootstrap draws random samples of size n with replacement, thousands of times. The jackknife leaves out one observation at a time, n times, so it gives the same answer every run.

6 min cram, 30 min full read. Based on the 2026 CFA® Program Level I curriculum, Quantitative Methods, Learning Module 7. This lesson is not in the 2027 curriculum.

Tailor this to you: take the self-assessment

Before this: The central limit theorem and the standard error of the mean, Bootstrapping: simulating from the data you have

On the exam

  • Describe the use of resampling (bootstrap, jackknife) to estimate the sampling distribution of a statistic

Describe how bootstrap and jackknife resampling estimate the sampling distribution of a statistic. Expect identification questions: with or without replacement, random or not, how many resamples, and when to use each.

How deeply to learn each part
Know the idea
Understand it in general. It frames other topics, but you will not calculate with it.
Use it
Understand it well enough to solve a question with it. Recognize when it applies.
Memorize
Learn it by heart. The exam will not give it to you.

You know this one. The full lesson is folded away. The takeaways, formulas and checkpoint below are your quick refresher, and the checkpoint is a fair test of whether you still do.

You tested strong here. The full lesson is folded away. The takeaways, formulas and checkpoint below are your quick refresher, and the checkpoint is a fair test of whether you still know it.

Cram mode: the one-screen version of this lesson. Switch to Full for the explanations, worked examples and interactives.

How do you measure precision without a formula?

For a sample mean, the standard error is s ÷ √n. For a median, a percentile or a ratio such as the Sharpe ratio, no such simple formula exists. Resampling gets around this. It uses the one sample you hold as a stand-in for the population, builds many new samples from it, computes the statistic in each, and treats the spread of those results as the statistic’s sampling variability.

The pattern of results is an empirical sampling distribution : built from computation on observed data, not derived from a formula. Two methods are examined: the bootstrap and the jackknife.

Resampling methods for inference
Resamplingnew samples built from the one you have
  • Bootstrap Memorize random, with replacement
    • Resample size Memorize n, the same as the original
    • Number of resamples B your choice, often 1,000 or more
    • Result varies a little from run to run
  • Jackknife Memorize leave one out, no replacement
    • Resample size n − 1
    • Number of resamples Memorize exactly n
    • Result is fixed Memorize same answer every run
Loading the interactive

How does the bootstrap work?

Memorize

The bootstrap draws repeated random samples from the original data, each the same size as the original, using sampling with replacement : each item drawn is put back, so it can be drawn again. In any one resample some observations appear several times and others not at all.

Bootstrap standard error, step by step
Bootstrapfrom one sample of n observations
  • 1. Resample Memorize draw n observations with replacement
  • 2. Compute the statistic (mean, median, ratio) for that resample
  • 3. Repeat B times for example 1,000
  • 4. Take the spread Memorize the standard deviation of the B results is the standard error

For a sample mean, the bootstrap standard error is the standard deviation of the B resample means, using a B − 1 divisor.

Bootstrap standard error Use it
sXˉ=1B−1∑b=1B(θ^b−θˉ)2s_{\bar{X}} = \sqrt{\frac{1}{B-1}\sum_{b=1}^{B}(\hat\theta_b - \bar\theta)^2}

Here θ̂_b is the statistic from resample b (a resample mean) and θ̄ is the average of all B of them. The method needs no distribution assumption and works for any statistic. It is used in finance for historical simulation and for judging a strategy’s performance against a benchmark. Because the draws are random, two runs give slightly different answers.

Rearrange itBootstrap standard error: solve for any one
The question asks for
An analyst draws 500 bootstrap resamples and computes each resample mean. The squared differences of those means from their average sum to 0.62. The bootstrap standard error of the sample mean is closest to:

√(0.62 ÷ (500 − 1)) = 0.0352

Bootstrap standard error0.0352

On your calculator
  1. 0.62÷(500−1)=√x

√x square root

  1. 0.62ENTER500ENTER1−÷g√x

ENTER enter (on the HP, puts the number on the stack) · g blue shift key · √x square root

How does the jackknife work?

Memorize

The jackknife leaves out one observation at a time, without putting it back. Drop observation 1 and compute the statistic on the other n − 1; return it, drop observation 2, and so on. A sample of n gives exactly n results. Nothing is random, so every run gives the same answer. It is used for the standard error, bias and confidence interval of an estimator, and suits small samples because it needs few computations.

To turn the n results into a standard error, a scaling factor is needed, because leave-one-out results sit much closer together than independent resamples would.

Jackknife standard error Know the idea
SE=n−1n∑i=1n(θi−θˉ)2SE = \sqrt{\frac{n-1}{n}\sum_{i=1}^{n}(\theta_i - \bar\theta)^2}
Rearrange itJackknife standard error: solve for any one
The question asks for
A jackknife on 4 observations gives leave-one-out results whose squared differences from their average sum to 2.2222. The jackknife standard error is closest to:

√((4 − 1) ÷ 4 × 2.2222) = 1.291

Jackknife standard error1.291

On your calculator
  1. (4−1)÷4×2.2222=√x

√x square root

  1. 4ENTER1−4÷2.2222×g√x

ENTER enter (on the HP, puts the number on the stack) · g blue shift key · √x square root

Which method should you use?

BootstrapJackknife
Sample drawnn, with replacementn − 1, leaving one out, no replacement
Number of resampleschosen (often 1,000+)n
Random?yes, results vary slightlyno, same result every time
Typical usestandard error, confidence intervals, complex statisticsstandard error and bias, small samples

Exam tip Bootstrap: with replacement, random, B of your choosing. Jackknife: leave one out, n of them, nothing random.

Neither method creates information. Both reuse the observations in your sample, so a sample that is unrepresentative gives an unrepresentative answer, however many resamples you run.

Go deeper Bootstrap for simulation versus bootstrap for inference

The simulation module used the bootstrap to generate possible future paths of returns. Here the mechanics are identical (draw from the observed data with replacement) but the goal differs: instead of building scenarios, you compute a statistic on each resample and study how it varies, to learn how precise it is.

Go deeper Why the sample can stand in for the population

The true sampling distribution would need many fresh samples from the real population, which you do not have. The bootstrap replaces the unknown population with the empirical distribution of your sample, and draws from it repeatedly. If the sample is representative, the variation across resamples approximates the variation across real samples.

Memorize this

MemorizeBootstrap versus jackknife

BootstrapJackknife
Drawsn, with replacementn − 1, one left out, no replacement
Resamplesyou choose B (1,000+)exactly n
Random?yes, results vary slightlyno, same result every run
Typical usestandard error, confidence intervals, statistics with no formulastandard error and bias, small samples

Memory hook Bootstrap = Bag with Replacement, shuffled at random. Jackknife = Just leave one out, in turn, so it cannot vary.

Know it cold Standard error from resamples: 1B−1∑(θ^b−θˉ)2\sqrt{\frac{1}{B-1}\sum(\hat\theta_b-\bar\theta)^2}. Divide by B−1B-1, then take the square root.

Resampling methods for inference
Resamplingnew samples built from the one you have
  • Bootstrap Memorize random, with replacement
    • Resample size Memorize n, the same as the original
    • Number of resamples B your choice, often 1,000 or more
    • Result varies a little from run to run
  • Jackknife Memorize leave one out, no replacement
    • Resample size n − 1
    • Number of resamples Memorize exactly n
    • Result is fixed Memorize same answer every run
Bootstrap standard error, step by step
Bootstrapfrom one sample of n observations
  • 1. Resample Memorize draw n observations with replacement
  • 2. Compute the statistic (mean, median, ratio) for that resample
  • 3. Repeat B times for example 1,000
  • 4. Take the spread Memorize the standard deviation of the B results is the standard error
Bootstrap standard error Use it
sXˉ=1B−1∑b=1B(θ^b−θˉ)2s_{\bar{X}} = \sqrt{\dfrac{1}{B-1}\sum_{b=1}^{B}(\hat\theta_b - \bar\theta)^2}
Quick example

B = 500 resample means lie a total squared distance of 0.62 from their average. √(0.62 ÷ 499) = 0.0352, in the same units as the data: 3.52% if the returns are decimals, 0.0352% if they are already in percent.

On your calculator
  1. 0.62÷(500−1)=√x 0.0352

√x square root

  1. 0.62ENTER500ENTER1−÷g√x 0.0352

ENTER enter (on the HP, puts the number on the stack) · g blue shift key · √x square root

Jackknife standard error Know the idea
SE=n−1n∑i=1n(θi−θˉ)2SE = \sqrt{\dfrac{n-1}{n}\sum_{i=1}^{n}(\theta_i - \bar\theta)^2}
Quick example

Five leave-one-out means lie a total squared distance of 1.20 from their average. √(4 ÷ 5 × 1.20) = √0.96 = 0.98.

On your calculator
  1. (5−1)÷5×1.2=√x 0.9798

√x square root

  1. 5ENTER1−5÷1.2×g√x 0.9798

ENTER enter (on the HP, puts the number on the stack) · g blue shift key · √x square root

How it is asked

  1. Which method draws with replacement?

    Which resampling method draws repeated samples of size n with replacement?

    Bootstrap. Jackknife leaves one out and does not replace it.

  2. How many resamples?

    For a sample of 40, the jackknife typically computes the statistic…

    40 times (one per left-out observation). 1,000 is a bootstrap-style count.

  3. No simple formula available

    A standard error for a fund’s median return, with no easy formula.

    Bootstrap. s ÷ √n works for a mean, not a median.

  4. Same answer each run?

    Which method gives identical results every run?

    Jackknife (deterministic). Bootstrap draws randomly.

Exam traps

  • Saying the jackknife samples with replacement. It leaves one observation out and does not replace it.
  • Saying the bootstrap gives identical results every run. Its draws are random, so results differ slightly.
  • Thinking resampling creates new information. It only reuses the one sample you have.
  • Using s ÷ √n for a statistic other than the mean, such as a median.

Checkpoint

7 exam-style questions. About 90 seconds each.

  1. 1Which resampling method draws repeated samples of size n with replacement from the observed data?

  2. 2For a sample of 40 observations, the jackknife typically computes the statistic:

  3. 3A risk analyst estimates the 10th percentile of a hedge fund's monthly returns from 72 months of data and wants a standard error for that estimate. No simple formula is at hand. The most appropriate approach is:

  4. 4An analyst draws 11 bootstrap resamples and computes each resample mean. The squared differences of those means from their own average sum to 0.40. The bootstrap estimate of the standard error of the sample mean is closest to:

  5. 5A jackknife on three observations gives leave-one-out means whose squared differences from their average sum to 2. Using SE = √[(n − 1) ÷ n × Σ], the jackknife standard error is closest to:

  6. 6In a bootstrap of a sample of 60 observations, each resample contains:

  7. 7Which statement about resampling is most accurate?

Key takeaways

  • Resampling estimates a statistic's standard error from the sample itself.
  • Bootstrap: n draws with replacement, repeated B times (your choice), random.
  • Jackknife: leave one out, n resamples, no randomness.
  • Use the bootstrap when no formula exists, such as for a median.
Bootstrap standard error Use it
sXˉ=1B−1∑b=1B(θ^b−θˉ)2s_{\bar{X}} = \sqrt{\dfrac{1}{B-1}\sum_{b=1}^{B}(\hat\theta_b - \bar\theta)^2}
Quick example

B = 500 resample means lie a total squared distance of 0.62 from their average. √(0.62 ÷ 499) = 0.0352, in the same units as the data: 3.52% if the returns are decimals, 0.0352% if they are already in percent.

On your calculator
  1. 0.62÷(500−1)=√x 0.0352

√x square root

  1. 0.62ENTER500ENTER1−÷g√x 0.0352

ENTER enter (on the HP, puts the number on the stack) · g blue shift key · √x square root

Jackknife standard error Know the idea
SE=n−1n∑i=1n(θi−θˉ)2SE = \sqrt{\dfrac{n-1}{n}\sum_{i=1}^{n}(\theta_i - \bar\theta)^2}
Quick example

Five leave-one-out means lie a total squared distance of 1.20 from their average. √(4 ÷ 5 × 1.20) = √0.96 = 0.98.

On your calculator
  1. (5−1)÷5×1.2=√x 0.9798

√x square root

  1. 5ENTER1−5÷1.2×g√x 0.9798

ENTER enter (on the HP, puts the number on the stack) · g blue shift key · √x square root

Questions about this lesson?

Where this comes back

Questions candidates ask

What is the difference between bootstrap and jackknife?

The bootstrap draws random resamples of size n with replacement, as many times as the analyst chooses, so its results vary slightly. The jackknife leaves out one observation at a time without replacement, producing exactly n resamples and the same answer every run.

How does bootstrapping estimate a standard error?

Draw many resamples of size n with replacement, compute the statistic in each, then take the standard deviation of those results (dividing by B − 1). That spread approximates the statistic's sampling variability, so it estimates the standard error.

Why use resampling instead of a formula?

Formulas such as s ÷ √n exist only for some statistics, mainly the mean. For a median, a percentile or a ratio there is no simple formula. Resampling lets the computer approximate the standard error from the sample alone, with no distribution assumed.

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  1. Sampling methods and sampling error
  2. The central limit theorem and the standard error of the mean
  3. Bootstrap and jackknife: resampling to estimate a standard error

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