Lesson 5

1. Explain the purpose of variance

and standard deviation
2. Determine the variance and the
standard deviation of a discrete
probability distribution.
set A set B
92 89
90 84
87 82
86 79
85 75
88.00 81.80
6.80 22.16
Variance and Standard Deviation
- They are called measures of
dispersion
- -They tell us how close or how far
apart the values of the random
variable are to each other
Determining the Variance
2
𝜎 − 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒
2
s − 𝑠𝑎𝑚𝑝𝑙𝑒 𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒

2 2
𝜎 = ෍(𝑋 − 𝜇) ●𝑃(𝑋)
Sample Problem 1

The number of cars sold per day at a local

car dealership, along with its
corresponding probabilities is shown in
the succeeding table. Compute the
variance and the standard deviation of the
probability distribution.
 X P(X)
0 1/10
1 2/10
2 3/10
3 2/10
4 2/10
X represents the number of cars sold per day
X P(X) X●P(X)
0 1/10 (0)(1/10) (0-2.2) (4.84)●(1/10)
0 1/10 0 -2.2 4.84 0.48
1 2/10 2/10 -1.2 1.44 0.29
2 3/10 6/10 -0.2 0.04 0.01
3 2/10 6/10 0.8 0.64 0.13
4 2/10 8/10 1.8 3.24 0.65
Σ= 2.2 Σ= 1.56
1.25
Determining the Standard
Deviation
𝜎 − 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛
s−𝑠𝑎𝑚𝑝𝑙𝑒 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛

σ= ෍(𝑋 − 𝜇) ●𝑃(𝑋)
2
Therefore, the average number
of cars sold per day is 2.2 or 2
with variance equal to 1.56 and
standard deviation of 1.25.