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**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

Copyright !..2) 3an (impson

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..

Copyright !..2) 3an (impson

$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.

Copyright !..2) 3an (impson

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