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Standard Deviation GMAT Questions1. What was the standard deviation of Company Rs earnings per day in January and February of this year?1) The standard deviation of Company Rs earnings per day in January of this year was $2.3 million.2) The standard deviation of Company Rs earnings per day in February of this year was $2.3 million.Ans: EConcept tested: Standard deviation can only be derived from the numbers in the list, or, standard deviation tests dispersion around the average.Explanation: Think about what you have learned about Standard Deviation: it is the way the numbers in a list are organized around the average. For example, if youre given an average of 10 and a standard deviation of 2, you know that most numbers are organized in the range of 8-12, or 6-14, depending on how many standard deviations away from the average were talking about. If you were given an average of 200, you could still have a standard deviation of 2, and the numbers would fall in the range of 198-202, or 196-204, also depending on the number of standard deviations. Compare that with an average of 200 and a standard deviation of 15. Its the same average, but now the numbers are organized much farther way, between 185-215, or 170-230.From this you should see that standard deviation refers to the dispersion of the numbers, not the actual average, and so given only the standard deviation, we know nothing at all about the average or the numbers used to make that average. As you learned in the lesson, the formula for standard deviation involves using all the numbers in the given list of numbers. In the case of this problem, the numbers would have to be the companys earnings each day in January and each day in February. Statement 1 tells us only what the standard deviation in January was, but tells us nothing about the actual numbers being used. We know that the standard deviation was $2.3 million. But what was the average? It could be $10 million or $200 million, for example, and still have the same standard deviation. Its not enough to describe what happens in February. Statement 2 presents the same issue.We are left with C or E. Since each month has the same standard deviation, does that mean that they will have the same standard deviation together? Thats what they want you to think, but its the other way around completely. Standard deviation is strict in order to find it, you MUST have the numbers in the list to figure out the average first, and then the standard deviation. Since we dont have the daily company earnings for this company in January and February, we cannot find the standard deviation for that time.2. The standard deviation of a divers score is calculated by finding the average (arithmetic mean) of the squared differences of each score from the average (arithmetic mean) of all the scores. An Olympic diver received the following scores: 6.0, 5.5, 7.0, 6.5, and 5.0. The standard deviation of her scores is in which of the following ranges?A) 0 1.9B) 2 3.9C) 4 6.9D) 7 7.9E) 8 9.9Ans: AConcepts tested: 1. Standard Deviation can never be larger than the range of the numbers. 2. Average of consecutive numbers is the number in the middle. 3. GMAT trick: embed the commonly known method for solving the problem in complicated terms within the problem itself, making it more complicated.Explanation: DO NOT calculate the standard deviation of these five numbers. Thats what they want you to do, and it will take A LOT of time. Rather, its important for the GMAT that you understand the meaning of standard deviation. People dont like that, but it will save you a lot of time on the test. Standard Deviation describes the way numbers are organized around their average. The greater the standard deviation, the greater the range of numbers, and vice versa. But most specifically, the standard deviation actually tells us the range of the numbers: If you were given an average of 200, and a standard deviation of 2, and the numbers would fall in the range of 198-202, or 196-204, depending on the number of standard deviations. Compare that with an average of 200 and a standard deviation of 15. Its the same average, but now the numbers are organized much farther way, between 185-215, or 170-230. Look at this list the average is easily calculated at 6.0 (another GMAT trick since theyre consecutive, its the number in the middle!) and the range is from 5 to 7. That means the greatest distance any number is from the average is 1. In that case, the standard deviation could never be more than 1! Even if there were 200 numbers between 5 and 7, the SD wouldnt be larger than 1. So the answer has to be A. 3. Is the standard deviation of Robertas 8 test scores higher than the standard deviation of Melissas scores on the same 8 tests?1) Melissas average score was 78 and Robertas average score was 85.2) The range of Melissas test scores was 0 and the range of Robertas test scores was 10.Ans: BConcepts tested: 1. The standard deviation of a list whos range is 0 is 0. 2. Standard deviation can only be derived from the numbers in the list, and has nothing to do with the average.Explanation: The first statement tells us that Robertas average score was higher, but that cannot be enough information because it does not tell us about the dispersion of each of the girls scores around the average. Remember that any average number comes from a list of numbers and the standard deviation describes how those numbers are organized in the list. If you were given an average of 200, and a standard deviation of 2, and the numbers would fall in the range of 198-202, or 196-204, depending on the number of standard
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