GMAT Standard Deviation Chapter 9: Standard Deviation Chapter 9B: Standard Deviation Chapter 9C: Standard Deviation
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This chapter is only for advanced students.

Statistical Measurements

Image that a politician in your state is up for re-election. Trying to impress the public with the work she has done, the politician announces at a press conference that at the end of her term the average yearly salary per person in the state is \$80,000.

Would you support her based on that number? It sounds good ­ it sounds  like everyone in her state is making \$80,000. But can we be sure? A reporter wants to know if her statistic is valid, and he picks three groups of five people randomly from the state. Each group has the same average, \$80,000. Let's look at the different groups now.

 Group 1 (avg. = \$80,000) Group 2 (avg. = \$80,000) Group 3 (avg. = \$80,000) Person 1 80,000 71,000 15,000 Person 2 80,000 74,000 30,000 Person 3 80,000 82,500 30,000 Person 4 80,000 82,500 100,000 Person 5 80,000 90,000 225,000

What can we learn from this chart?

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