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08 Dec 2020, 05:45
Kudos
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B
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Difficulty:
35%
(medium)
Question Stats:
73% (01:28) correct
27%
(02:10)
wrong
based on 64
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The mean salary in ICM ltd. was $1,500, and the standard deviation was $400. A year later each employee got a $100 raise. After another year each employee's salary was again increased by 20%. If during these years, no new employee was hired and old employee was fired, then what is the standard deviation of the current salary ?
A. 460
B. 480
C. 500
D. 560
E. 600
A. 460
B. 480
C. 500
D. 560
E. 600
08 Dec 2020, 06:11
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Bunuel
If a value x, is added to or subtracted from a set of numbers then the mean increases or decreases by x, but the standard deviation remains unchanged.
If a set of numbers is multiplied by x, then the mean of the new distribution is x times the mean of the original distribution and the standard deviation is also x times the standard deviation of the original distribution = 400.
When the salary is increased by $100, the standard deviation remains unchanged, but when the salaries are increased by 20% (Each salary is multiplied by 1.2), the standard deviation also gets multiplied by 1.2.
Therefore the standard deviation of the new distribution = 400 * 1.2 = 480
Option B
Arun Kumar
22 Feb 2026, 06:19
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