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# What was the standard deviation of Company R s earnings per

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CIO
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What was the standard deviation of Company R s earnings per [#permalink]  28 Jun 2007, 06:21
What was the standard deviation of Company R’s earnings per day in January and February of this year?

1) The standard deviation of Company R’s earnings per day in January of this year was \$2.3 million.

2) The standard deviation of Company R’s earnings per day in February of this year was \$2.3 million.
Senior Manager
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E I believe.

You cannot compute SD for a set with SD for individual sets.
We need to know # of elements in the set.
Director
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Standard deviation is the measure of spread of the elements around the mean.
Here we don't know the mean and the individual element's value, so can't predict the st dev of the combined set.
Should be 'E'
Senior Manager
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On second thoughts, could it be C?

Variance = Sqr(SD)
V1=SD1^2
V2=SD2^2

SD(Jan&Feb) = SQRT(V)

Any suggestions?
Manager
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ArvGMAT wrote:
On second thoughts, could it be C?

Variance = Sqr(SD)
V1=SD1^2
V2=SD2^2

SD(Jan&Feb) = SQRT(V)

Any suggestions?

Could you please tell me what Vairance is?
Director
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vshaunak@gmail.com wrote:
Standard deviation is the measure of spread of the elements around the mean.
Here we don't know the mean and the individual element's value, so can't predict the st dev of the combined set.
Should be 'E'

agree with E.

if,

a: 10, 15, 20, 25, 30
b: 10, 15, 20, 25, 30
a & b: 10, 15, 20, 25, 30, 10, 15, 20, 25, 30,

each has a SD of 7.91 but a and b have a SD of 7.45. the SD is different from the prvious one.

a: 10, 15, 20, 25, 30
b: 100, 105, 110, 115, 120
a & b: 10, 15, 20, 25, 30, 100, 105, 110, 115, 120

each has a SD of 7.91 but a and b have a SD of 48.02.

moreover, there are multiple of scenerios. so should be E.
CIO
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Himalayan wrote:
vshaunak@gmail.com wrote:
Standard deviation is the measure of spread of the elements around the mean.
Here we don't know the mean and the individual element's value, so can't predict the st dev of the combined set.
Should be 'E'

agree with E.

if,

a: 10, 15, 20, 25, 30
b: 10, 15, 20, 25, 30
a & b: 10, 15, 20, 25, 30, 10, 15, 20, 25, 30,

each has a SD of 7.91 but a and b have a SD of 7.45. the SD is different from the prvious one.

a: 10, 15, 20, 25, 30
b: 100, 105, 110, 115, 120
a & b: 10, 15, 20, 25, 30, 100, 105, 110, 115, 120

each has a SD of 7.91 but a and b have a SD of 48.02.

moreover, there are multiple of scenerios. so should be E.

That's it! E is the answer. And this is a good explanation of why. In fact, even if Himalayan didn't compute the SD, you could still visually see that with multiple sets, even with the same SD, putting them together you get wide variations.
Director
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ian7777 wrote:
That's it! E is the answer. And this is a good explanation of why. In fact, even if Himalayan didn't compute the SD, you could still visually see that with multiple sets, even with the same SD, putting them together you get wide variations.

thanks ian7777.

it is one of the best gmat question.
CIO
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Himalayan wrote:
ian7777 wrote:
That's it! E is the answer. And this is a good explanation of why. In fact, even if Himalayan didn't compute the SD, you could still visually see that with multiple sets, even with the same SD, putting them together you get wide variations.

thanks ian7777.

it is one of the best gmat question.

Thanks. It's very representative of the real exam, I think. I'll post another one.
CEO
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We have a SD for one month and a SD for another month. The months can have different means. Combining them requires the value of the mean of each of the two sets and the number of elements of each sets. only then can we take the mean of the combined set and calc the SD of the combined set.
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