Question

Describe the steps necessary to calculate the variance of a sample. Why is it important to understand variance?

Discuss a situation in which you have used the variance of a sample to help solve a problem.

Answer 1

Steps necessary to calculate the variance of a sample.:

step 1) Write your sample data set.

step 2) Write down the sample variance formula

• = ^{∑[(x- mean}]}/_{(n - 1)}
• is the variance. Variance
• is a term in your data set.
• ∑, meaning "sum," tells you to calculate the following terms for each value of , then add them together.
• x̅ is the mean of the sample.
• n is the number of data points

step 3) Calculate the mean of the sample

find the sum of all terms and divide by number of terms.

step 4) Subtract the mean from each data point.and square them.

step 5) Find the sum of the squared values.

step 6) Divide by n - 1, where n is the number of data points

Importance of variance:

Variance (σ²) in statistics is a measurement of the spread between numbers in a data set. That is, it measures how far each number in the set is from the mean and therefore from every other number in the set.

Variance helps in understanding profit business, industry which can not be determined by calculated by mean.