Describe a scenario

Question

Describe a scenario where you expect a set of data to have

 

a.) a large standard deviation 

 

b.) a small standard deviation

 

 

 

The prize for winning a contest can be chosen from category A and category B. Prizes from category A have a mean of $1000 and a standard deviation of $50. Prizes from category B have a mean of $1000 and a standard deviation of $300. Describe an advantage of each prize category. 

Answer 1

Hello, thank you for taking the time to post your question!

Typically a small standard deviation would refer to a situation where you have a super precise process, so that could be something like the manufacture of a brand new paperclip that has been manufactured by an automated, precise machine.

Larger standard deviations would occur when there is a wide range of values, so that could be something like the closing price for a particularly volatile stock over the course of the year.

Hopefully that gets you moving in the right direction! Feel free to reach out if you have any questions beyond that :)