Tag: business economics and quantitative methods

Questions Related to business economics and quantitative methods

If the standard deviation of the values $2,4,6,8$ is $2.33$, then the standard deviation of the values $4,6,8,10$ is

business economics and quantitative methods measures of dispersion and skewness shortcut method to find variance and standard deviation variance and standard deviation measures of dispersion

  1. $0$

  2. $2.58$

  3. $4.66$

  4. None of these

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Correct Option: B
Explanation:

Given data values are $4,6,8,10$


Mean of the data is $\dfrac{4+6+8+10}{4}=\dfrac{28}{4}=7$

Therefore standard deviation is $\sqrt{\dfrac{(4-7)^2+(6-7)^2+(8-7)^2+(10-7)^2}{4-1}}=\sqrt{\dfrac{20}{3}}=2.58$

The sum of squared deviations of a set of $n$ values from their mean is

business economics and quantitative methods measures of dispersion and skewness shortcut method to find variance and standard deviation variance and standard deviation measures of dispersion

  1. Minimum

  2. Least

  3. Maximum

  4. Zero

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Correct Option: B
Explanation:

The sum of the squared deviations from their their mean is the least value.



If $y=-8x-5$ and SD of $x$ is $3$, then SD of $y$ is:

business economics and quantitative methods measures of dispersion and skewness shortcut method to find variance and standard deviation variance and standard deviation measures of dispersion

  1. $8$

  2. $24$

  3. $3$

  4. None of these

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Correct Option: B
Explanation:
Given that std dev of x is $\sigma(x)=3$
Given equation is $y=-8x-5$

applying std dev on both sides we get

$\sigma(y)=\sigma(-8x-5)$

$\implies \sigma(y)=\sigma(-8x)+\sigma(-5)$

$\implies \sigma(y)=\sigma(-8x)+0$ (since, $\sigma(c)=0$)

$\implies \sigma(y)=8\sigma(x)$ (since, $\sigma(aX)=|a|\sigma(X)$)

$\implies \sigma(y)=8\times 3=24$

Therefore, standard deviation of $y$ is $24$.

Suppose for $40$ observations, the variance is $50$. If all the observations are increased by $20$, the variance of these increased observation will be

business economics and quantitative methods measures of dispersion and skewness shortcut method to find variance and standard deviation variance and standard deviation measures of dispersion

  1. $20$

  2. $50$

  3. $30$

  4. None of these

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Correct Option: B
Explanation:

The variance for $40$ observations is $50$
Variance is independent of the number of observations. Therefore, variance for $60$ observations is $50$

The variance of $5$ numbers is $10$. If each number is divided by $2$, then the variance of new numbers is

business economics and quantitative methods measures of dispersion and skewness shortcut method to find variance and standard deviation variance and standard deviation measures of dispersion

  1. $5.5$

  2. $2.5$

  3. $5$

  4. None of these

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Correct Option: B
Explanation:

Given that variance of $5$ number is $10$


Therefore, $Var(X)=10$

Given that each number is divided by $2$

Therefore, variance of new numbers is $Var(\dfrac X2)$

$Var(\dfrac X2)=\dfrac 14Var(X)=\dfrac 1 4(10)=2.5$

Hence, variance of new numbers is $2.5$

Find $Var(2X+3)$

business economics and quantitative methods measures of dispersion and skewness shortcut method to find variance and standard deviation variance and standard deviation measures of dispersion

  1. $5 Var(X)+3$

  2. $4 Var(X)+3$

  3. $4 Var(X)$

  4. None of these

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Correct Option: C
Explanation:

$Var(2X+3)=Var(2X)+Var(3)$


$\implies Var(2X+3)=Var(2X)+0$ (Since, $Var(c)=0$)

$\implies Var(2X+3)=2^2Var(X)$ (Since, $Var(aX)=a^2Var(X)$)

$\implies Var(2X+3)=4Var(X)$

If a, b are constants then, $Var(a+bX)$ is

business economics and quantitative methods measures of dispersion and skewness shortcut method to find variance and standard deviation variance and standard deviation measures of dispersion

  1. $Var(a)+Var(X)$

  2. $Var(a)-Var(X)$

  3. $b^2Var(X)$

  4. None of these

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Correct Option: C
Explanation:

$Var(a+bX)=Var(a)+Var(bX)$


$\implies Var(a+bX)=0+Var(bX)$ (Since, $Var(c)=0$)

$\implies Var(a+bX)=b^2Var(X)$ (Since, $Var(aX)=a^2Var(X)$)

If the standard deviation of a population is $9$, the population variance is:

business economics and quantitative methods measures of dispersion and skewness shortcut method to find variance and standard deviation variance and standard deviation measures of dispersion

  1. $9$

  2. $3$

  3. $21$

  4. $81$

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Correct Option: D
Explanation:

We know that variance is square of standard deviation.


Given that standard deviation is $9$

Therefore, variance $=9^2=81$

If $X, Y $ are independent then $SD(X-Y)$ is:

business economics and quantitative methods measures of dispersion and skewness shortcut method to find variance and standard deviation variance and standard deviation measures of dispersion

  1. $SD(X)-SD(Y)$

  2. $SD(X)+SD(Y)$

  3. $\sqrt{SD(X)+SD(Y)}$

  4. None of these

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Correct Option: B
Explanation:

$SD(X-Y)=SD(X)+SD(-Y)$


$\implies SD(X-Y)=SD(X)+SD(Y)$ (since, $SD(aX)=|a|SD(X)$)

The variance of $20$ observations is $5$. If each observation is multiplied by $2$, then what is the new variance of the resulting observations?

business economics and quantitative methods measures of dispersion and skewness shortcut method to find variance and standard deviation variance and standard deviation measures of dispersion

  1. $5$

  2. $10$

  3. $20$

  4. $40$

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Correct Option: C
Explanation:

If each observation is multiplied by $2$, then mean$(\mu )$ will get doubled.

Now, variance $=\sigma ^{ 2 }=\dfrac { (X-\mu )^{ 2 } }{ n } $
Now here both $X$ and $\mu $ will be doubled, so the variance will become four times.
Thus, the new variance will be $4$ times the older variance which is $4\times 5=20$.
Hence, C is correct.