Scribd
Upload
29 views12 pages

Standard Deviation CEU

Standard deviation

Uploaded by

Nero Kasuto
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
29 views12 pages

Standard Deviation CEU

Standard deviation

Uploaded by

Nero Kasuto
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 12

STANDARD DEVIATION

 is calculated as the square root of the


variance

 In finance ,is applied to the annual rate


of return of an investment to measure
the investment’s volatility .

 Is also known as historical volatility and


is used by investors as a gauge for the
amount of expected volatility.
VARIANCE :
 Is a mathematical expectation of the
average squared deviations from the
mean.

 Volatility :
 is a measure of risk ,so this statistics
can help determine the risk an
investor might take on when
purchasing a specific security.
STANDARD DEVIATION &
VARIANCE
 SD= Σ( x –Ⴟ )² SD = Σ( x –Ⴟ )²

n–1 n
 Sample is used Population is used

V = Σ (x- Ⴟ )²

n-1 V = Σ( x –Ⴟ )²

n
Where :x= the value of any particular
observation or measurement
Ⴟ = mean and n= is the
number of values
EXAMPLE :UNGROUP
DATA/SAMPLE
 The daily rates of a sample of eight employees
at GMS Inc. are
550,420,560,500,700,670,860,480. Find the
variance and standard deviation .

 Solution :
 Step1: Compute the mean of the data
Ⴟ =Σx/n=
550+420+560+500+700+670+860+480 / 8
= 4,740 /8
= 592.50
STEP2:
 Subtract the mean from each of the value data set.
 x x- Ⴟ
 550 -42.5
 420 -172.5
 560 -32.5
 500 -92.5
 700 107.5
 670 77.5
 860 267.5
 480 - 112.5

 Ⴟ =592.50
 Σ x= 4,740
STEP3
 Square the x- Ⴟ ,then get the sum
 ( x- Ⴟ ) ^2
 1,806.25
 29,756.25
 1,056.25
 8,556.25
 11,556.25
 6,006.25
 71,556.25
 12,656.25
 total Σ (x- Ⴟ)^2= 142,950
 The sum of the squared deviations
STEP4:
 Solve for variance and the standard
deviation.
 We can also obtain the standard
deviation by simply extracting the
square root of the variance.

 V= Σ (x- Ⴟ)^2 / n-1 = 142,950/8-1


 variance = 20,421.43
CONTINUATION:
 STD.DEVIATION :

 = 142,950/8-1
 = 20,421.43
 SD = 142.90
 Hence,the variance is PHP20,421.43 and
 The standard deviation is 142.90
EXAMPLE
UNGROUP/POPULATION
 The monthly incomes of the five
research directors of Recoletos schools
are 55,000, 59,500 ,62,500 ,57,000 ,and
61,000.Find the Variance and Standard
Deviation.

 Solution:
 Step1: Compute the mean of the data set
 Ⴟ = Σx/n
=55,000+59,500+62,500+57,000+61,000/5
 =295,000/5
 = PHP59,000
STEP2: SUBTRACT THE POPULATION
MEAN FROM EACH OF THE VALUE IN
THE DATA SET :

 x x-Ⴟ

 55,000 -4,000
 59,500 500
 62,500 3,500
 57,000 -2000
 61,000 2,000

 Ⴟ = 59,000
STEP3: GET THE SQUARE OF
X - Ⴟ ,THEN GET THE SUM

 ( x- Ⴟ ) ^2
 16,000,000
 250,000
 12,250,000
 4,000,000
 4,000,000

 Σ (x- Ⴟ)^2 =36,500,000


STEP4: SOLVE FOR THE POPULATION
VARIANCE & POPULATION
STD.DEVIATION

 Variance =Σ (x- Ⴟ)^2 /n


 = 36,500,000/5
 V = 7,300,000
 SO,STD.DEVIATION IS,
 7,300,000
 SD=2,701.85
 Hence,the population variance is
7,300,000 and population std. deviation
is 2,701.85

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy