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Standard Deviation GMAT Questions

1. What was the standard deviation of Company R’s earnings per day in January and
February of this year?
1) The standard deviation of Company R’s earnings per day in January of this
year was !." mi##ion.
!) The standard deviation of Company R’s earnings per day in February of this
year was !." mi##ion.
$ns% &
Con'ept tested% (tandard deviation 'an on#y be derived from the numbers in the #ist) or)
standard deviation tests dispersion around the average.
&*p#anation%
Thin+ about what you have #earned about (tandard ,eviation% it is the way the numbers
in a #ist are organi-ed around the average. For e*amp#e) if you’re given an average of 1.
and a standard deviation of !) you +now that most numbers are organi-ed in the range of
/01!) or 1012) depending on how many standard deviations away from the average we’re
ta#+ing about. 3f you were given an average of !..) you 'ou#d sti## have a standard
deviation of !) and the numbers wou#d fa## in the range of 14/0!.!) or 1410!.2) a#so
depending on the number of standard deviations. Compare that with an average of !..
and a standard deviation of 15. 3t’s the same average) but now the numbers are organi-ed
mu'h farther way) between 1/50!15) or 16.0!"..
From this you shou#d see that standard deviation refers to the dispersion of the numbers)
not the a'tua# average) and so given only the standard deviation) we +now nothing at a##
about the average or the numbers used to ma+e that average.

$s you #earned in the #esson) the formu#a for standard deviation invo#ves using a## the
numbers in the given #ist of numbers. 3n the 'ase of this prob#em) the numbers wou#d
have to be the 'ompany’s earnings ea'h day in January and ea'h day in February.
(tatement 1 te##s us on#y what the standard deviation in January was) but te##s us nothing
about the a'tua# numbers being used. We +now that the standard deviation was !."
mi##ion. 7ut what was the average? 3t 'ou#d be 1. mi##ion or !.. mi##ion) for
e*amp#e) and sti## have the same standard deviation. 3t’s not enough to des'ribe what
happens in February.
(tatement ! presents the same issue.
We are #eft with C or &. (in'e ea'h month has the same standard deviation) does that
mean that they wi## have the same standard deviation together? That’s what they want
you to thin+) but it’s the other way around 'omp#ete#y. (tandard deviation is stri't 8 in
order to find it) you 9:(T have the numbers in the #ist to figure out the average first) and
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then the standard deviation. (in'e we don’t have the dai#y 'ompany earnings for this
'ompany in January and February) we 'annot find the standard deviation for that time.
!. The standard deviation of a diver’s s'ore is 'a#'u#ated by finding the average
;arithmeti' mean) of the s<uared differen'es of ea'h s'ore from the average ;arithmeti'
mean) of a## the s'ores. $n =#ympi' diver re'eived the fo##owing s'ores% 1..) 5.5) 6..)
1.5) and 5... The standard deviation of her s'ores is in whi'h of the fo##owing ranges?
$) . 8 1.4
7) ! 8 ".4
C) 2 8 1.4
,) 6 8 6.4
&) / 8 4.4
$ns% $
Con'epts tested% 1. (tandard ,eviation 'an never be #arger than the range of the numbers.
!. $verage of 'onse'utive numbers is the number in the midd#e. ". >9$T tri'+% embed
the 'ommon#y +nown method for so#ving the prob#em in 'omp#i'ated terms within the
prob#em itse#f) ma+ing it more 'omp#i'ated.
&*p#anation% ,= ?=T 'a#'u#ate the standard deviation of these five numbers. That’s
what they want you to do) and it wi## ta+e $ @=T of time. Rather) it’s important for the
>9$T that you understand the meaning of standard deviation. Aeop#e don’t #i+e that) but
it wi## save you a #ot of time on the test.
(tandard ,eviation des'ribes the way numbers are organi-ed around their average. The
greater the standard deviation) the greater the range of numbers) and vi'e versa. 7ut most
spe'ifi'a##y) the standard deviation a'tua##y te##s us the range of the numbers% 3f you were
given an average of !..) and a standard deviation of !) and the numbers wou#d fa## in the
range of 14/0!.!) or 1410!.2) depending on the number of standard deviations. Compare
that with an average of !.. and a standard deviation of 15. 3t’s the same average) but
now the numbers are organi-ed mu'h farther way) between 1/50!15) or 16.0!"..
@oo+ at this #ist 8 the average is easi#y 'a#'u#ated at 1.. ;another >9$T tri'+ 8 sin'e
they’re 'onse'utive) it’s the number in the midd#eB) and the range is from 5 to 6. That
means the greatest distan'e any number is from the average is 1. 3n that 'ase) the
standard deviation 'ou#d never be more than 1B &ven if there were !.. numbers between
5 and 6) the (, wou#dn’t be #arger than 1. (o the answer has to be $.
". 3s the standard deviation of Roberta’s / test s'ores higher than the standard deviation
of 9e#issa’s s'ores on the same / tests?
1) 9e#issa’s average s'ore was 6/ and Roberta’s average s'ore was /5.
!) The range of 9e#issa’s test s'ores was . and the range of Roberta’s test s'ores
was 1..
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$ns% 7
Con'epts tested% 1. The standard deviation of a #ist who’s range is . is .. !. (tandard
deviation 'an on#y be derived from the numbers in the #ist) and has nothing to do with the
average.
&*p#anation%
The first statement te##s us that Roberta’s average s'ore was higher) but that 'annot be
enough information be'ause it does not te## us about the dispersion of ea'h of the gir#s’
s'ores around the average. Remember that any average number 'omes from a #ist of
numbers and the standard deviation des'ribes how those numbers are organi-ed in the
#ist. 3f you were given an average of !..) and a standard deviation of !) and the numbers
wou#d fa## in the range of 14/0!.!) or 1410!.2) depending on the number of standard
deviations. Compare that with an average of !.. and a standard deviation of 15. 3t’s the
same average) but now the numbers are organi-ed mu'h farther way) between 1/50!15) or
16.0!".. 7ased on that) the averages a#one 'annot des'ribe the #ist of numbers they
'ome from) and this statement 'annot answer the <uestion.
The se'ond statement te##s us that the range of 9e#issa’s test s'ores was .. That means
there is no dispersion) and thus) her standard deviation must be . as we##. (in'e Roberta
has a range of 1.) there must be some dispersion) so she must have a higher standard
deviation than 9e#issa.
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