COMPUTATIONAL

ERW I N L. MEDI NA
Measures of Variation

Range

Standard Deviation

Variance

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COMPUTER SOFTWARE CORDILLERAS ERWIN L. MEDINA, LPT, CPA, MBA
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The Range

THE DIFFERENCE BETWEEN THE LARGEST

AND SMALLEST VALUES OF A DISTRIBUTION
Find the range:
10, 13, 17, 17, 18

The range = largest minus smallest

= 18 minus 10 = 8

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COMPUTER SOFTWARE CORDILLERAS ERWIN L. MEDINA, LPT, CPA, MBA
COLLEGE OF ACCOUNTANCY
The standard deviation

A MEASURE OF THE AVERAGE VARIATION OF

THE DATA ENTRIES FROM THE MEAN
Standard deviation of a sample

 (x  x)
2

s
n 1 mean of the
sample

n = sample size

AE114: STATISTICAL ANALYSIS WITH UNIVERSITY OF THE

COMPUTER SOFTWARE CORDILLERAS ERWIN L. MEDINA, LPT, CPA, MBA
COLLEGE OF ACCOUNTANCY
 To calculate standard deviation of a
sample

Calculate the mean of the sample.

Find the difference between each entry (x) and the mean. These differences
will add up to zero.
Square the deviations from the mean.
Sum the squares of the deviations from the mean.
Divide the sum by (n  1) to get the variance.
Take the square root of the variance to get the standard deviation.

AE114: STATISTICAL ANALYSIS WITH UNIVERSITY OF THE

COMPUTER SOFTWARE CORDILLERAS ERWIN L. MEDINA, LPT, CPA, MBA
COLLEGE OF ACCOUNTANCY
The Variance

THE SQUARE OF THE STANDARD DEVIATION

Variance of a Sample

 (x  x)
2

s  2

n 1
AE114: STATISTICAL ANALYSIS WITH UNIVERSITY OF THE
COMPUTER SOFTWARE CORDILLERAS ERWIN L. MEDINA, LPT, CPA, MBA
COLLEGE OF ACCOUNTANCY
Find the standard deviation and
variance

x x x (x  x ) 2

30 4 16
26 0 Sum = 0 0
22 4 16
___
78 mean= 26 32
 The variance

 ( x  x) 2

s 
2
= 32  2 =16
n 1
The standard deviation

s= 16  4
Find the mean, the standard
deviation and variance
x xx (x - x) 2

4 1 1

5 0 0

5 0 0

7 2 4

4 1 1

25 6
The mean, the standard deviation and
variance

Mean =5

S tan dard deviation  1.5  1.22

6
Variance   1 .5
4
Computation formula for sample
standard deviation:

SS x
s
n 1

where SS x   x
2

  x
2

AE114: STATISTICAL ANALYSIS WITH UNIVERSITY OF THE

COMPUTER SOFTWARE CORDILLERAS ERWIN L. MEDINA, LPT, CPA, MBA
COLLEGE OF ACCOUNTANCY
To find  x 2

SQUARE THE X VALUES,

THEN ADD.
To find 
( x ) 2

Sum the x values, then square.

Use the computing formulas to
find s and s2

x x2 n=5

4 16 (Sx) 2 = 25 2 = 625
5 25 Sx2 = 131
5 25
SSx = 131 – 625/5 = 6
7 49
s2 = 6/(5 –1) = 1.5
4 16
s = 1.22
25 131
Population Mean and Standard
Deviation

population mean     x
N

population standard deviation      x  x  2

where N  number of data values in the population

COEFFICIENT OF VARIATION:

A MEASUREMENT OF THE RELATIVE

VARIABILITY (OR CONSISTENCY) OF
DATA

s 
CV   100 or  100
x 
CV is used to
compare variability or
consistency

A sample of newborn infants had a mean weight

of 6.2 pounds with a standard deviation of 1
pound.

A sample of three-month-old children had a mean

weight of 10.5 pounds with a standard deviation of
1.5 pounds.

Which (newborns or 3-month-olds) are more

variable in weight?
 To compare variability,
compare Coefficient of Variation

FOR NEWBORNS: Higher CV: more

CV = 16.13% variable
FOR 3-MONTH-
OLDS: CV = 14.29% Lower CV:
more consistent
Use Coefficient of Variation

 TO COMPARE TWO GROUPS OF DATA,

 TO ANSWER:

 WHICH IS MORE CONSISTENT?

 WHICH IS MORE VARIABLE?
CHEBYSHEV'S THEOREM

For any set of data and for any number k, greater

than one, the proportion of the data that lies within
k standard deviations of the mean is at least:

1
1
k 2

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COMPUTER SOFTWARE CORDILLERAS ERWIN L. MEDINA, LPT, CPA, MBA
COLLEGE OF ACCOUNTANCY
CHEBYSHEV'S THEOREM for k = 2

According to Chebyshev’s Theorem, at

least what fraction of the data falls
within “k” (k = 2) standard deviations of
the mean?
1 3
At least 1  2 2  4  75 %
of the data falls within 2 standard deviations of
the mean.
CHEBYSHEV'S THEOREM for k = 3

According to Chebyshev’s Theorem, at

least what fraction of the data falls
within “k” (k = 3) standard deviations of
the mean?
1 8
At least 1  3 2  9  88 . 9 %
of the data falls within 3 standard deviations of
the mean.
CHEBYSHEV'S THEOREM for k =4

According to Chebyshev’s Theorem, at

least what fraction of the data falls
within “k” (k = 4) standard deviations of
the mean?
1 15
At least 1  4 2  16  93 . 8 %
of the data falls within 4 standard deviations of
the mean.
Using Chebyshev’s Theorem

A mathematics class completes an examination

and it is found that the class mean is 77 and the
standard deviation is 6.

According to Chebyshev's Theorem, between

what two values would at least 75% of the
grades be?
 Mean = 77
Standard deviation = 6
At least 75% of the grades would be in the
interval:

x  2 s to x  2 s
77 – 2(6) to 77 + 2(6)
77 – 12 to 77 + 12
65 to 89