Quant: Standard Deviation

Hello,

If the mean is given (i.e 7.52), could you still use a DATA function to get the SD or need to calculate it manually just like to answer?

Questions:

Tony, an analyst with a research firm, calculated the expected value of Deal King’s EPS as 7.52 based on its probability distribution for the year 20X6. Probability distribution for Deal King’s EPS: Probability 0.15 0.55 0.23 0.07 EPS () 9.25 8.50 7.50 5.75 The standard deviation of the Deal King’s EPS for the year 20X6 is closest to: A. 1.1965.

answer:

σ2 = ∑n i=1(Prob.) x [X -E(X)]2

σ2 = (0.15) x (9.25 - 7.52)2 + (0.55) x (8.50 - 7.52)2 + (0.23) x (7.50 - 7.52)2 + (0.07) x (5.75 - 7.52)2 = 1.0938

thanks

You can use DATA: just make the Y values 15, 55, 23, and 7.

I tried but I did no get the answer.

If 1-V: Sx=8.69 SD:.864

If LIN: Sx=1.5138; SD=1.31

Not sure what I did wrong

thanks

If I use the probabilities as given, I get a mean EPS of $8.19. STAT will not work if they’re forcing in 7.52 as the mean EPS.