BIJU PATTNAIK COLLAGE OF SCIENCE AND

EDUCATION
JAYDEV BIHAR, BBSR
BUSINESS MATHEMATICS AND STATISTICS
STANDARD DEVIATION

NAME OF THE STUDENT: KHUSHRAJ BHUTRA

CHSE Roll NO.:
CLASS: +2 2ND YEAR COMMERCE
CLASS ROLL: IC18-045
ACADEMY YEAR: 2019-20
TEACHERS IN-CHARGE: JUDHISTRI DAS
SIGN OF INTERNAL SIGN OF EXTERNAL
 CERTIFICATE
This is to certify that Mr. Khushraj bhutra
bearing Roll No. IC18-045 is a student of +2
2nd year commerce of this collage he has
successfully completed his project under my
guidance and supervision towards the
fulfillment of the practical examination in
business studies conducted by the Council of
Higher Secondary Education, Odisha, for the
academic year 2019-2020.

Teacher’s Signature:
Name of subject teacher: Judhistir das
 ACKNOWLEDGEMENT
I would like to express my gratitude to my
teacher Mr. Judhistir das who gave me the
amazing opportunity to do this wonderful
project report on Standard deviation.
Secondly, I would also like to thank my
parents and friends who helped me a lot in
finalizing this project within the stipulated
time frame.

Name of the student: - Khush raj bhutra

CHSE Roll No.:-
 Standard deviation
Content Page no.
1) Introduction 1
2) Features 1
3) Merits and Demerits 2-5
4) Method of computation 6-20
 Direct method (7-10)
 Short cut method (11-14)
 Step deviation method (15-17)
 Method based on values (18-20)
5) Relative standard Deviation 21-22
6) Algebraic Properties of standard 23-25
deviation
 STANDARD DEVIATION
Introduction:
Standard deviation may be defined as the square
root of the arithmetic average of the square of
deviations taken from the arithmetic average of a
series.
Features:
1. The deviation of the items is taken from the
arithmetic average of a series.
2. Plus and minus signs are taken into account
while finding the deviation of the items.
3. All the deviations are squared up to neutralize
the reducing effect of the minus deviations.
4. The square root of the average of the squared
deviations is found out in order to neutralize the
effects of squaring up of the deviations.

1
 Merits and Demerits of Standard Deviation:
Merits:-
1) It is rigidly defined and free from any
ambiguity.
2) Its calculation is based on all the observations
of a series and it cannot be correctly calculated
ignoring any item of a series.
3) It strictly follows the algebraic principles and it
never ignores the + and - signs like the mean
deviation.
4) It is capable of further algebraic treatment as it
has a lot of algebraic properties.
5) It is used as a formidable instrument in making
higher statistical analysis viz. : correlation
skewness regression and sample studies etc.
6) It is not much affected by the fluctuations in
sampling for which it is widely used in testing the
hypotheses and for conducting the different tests
of significance viz. : x test t-test etc.

2
7) In a normal distribution x̅ +1 6 covers 68.27%
of the values for which it is called a standard
measure of dispersion.
8) It exhibits the scatter of dispersion of the
various items of a series from its arithmetic mean
and thereby justifies its name as a measure of
dispersion.
9) It enables us to make a comparative study of
the two or more series and to tell upon the
inconsistency or stability through calculation of
the important factors viz. co-efficient of variation
variance etc.
10) It enables us to determine the reliability of the
Mean of the two or more series when they show
the identical means.
11) It can be calculated through a good number of
methods yielding the same results.

12) It maintains an empirical relation with other

measures of dispersion as under
3
Range= 6 σ
QD= 2/3 σ
MD= 4/5 σ
13) It has a good number of algebraic properties
for which it is possible to determine the number
of many connected factors like combined
standard deviation of two or more series.

4
Demerits:-
1) It is not understood by a common man.
2) Its calculation is difficult as it involves many
mathematical models and processes.
3) It is affected very much by the extreme values
of a series in as much as the squares of deviations
of big items become proportionately bigger than
the squares of the smaller items.
4) It cannot be used for comparing the dispersion
of two or more series given in different units.

5
 Methods Of Computation:
Basing up the definition and the essential
characteristics cited above there can be four
different methods for computing the standard
deviation of a series.
These are as follows:
1. Direct method
2. Short cut method
3. Step deviation method
4. Method based on values

6
1. Direct method -Under this method the
standard deviation is computed on the basis of
the deviations of the items from their actual
arithmetic average. This method is suitable when
the arithmetic average of the series comes out to
be a round and definite figure.
The formulas applied under this method are:
In case of individual In case of discrete and
series Continuous
(σ =√∑x2/N) series (σ =√∑fx2/N)

σ = Standard deviation of the items

∑x2=Total of the square of deviations of the items
taken from their actual mean, and x=(X- x̅)
N= the total number of observation or frequency
∑fx2 = The total or the product of the square of
deviation and their respective frequencies.

7
 Example of Direct method (Individual Series)
X: 5 10 15 20 25 30 35

X (X- x̅) x2
x
5 -15 225
10 -10 100
15 -5 25
20 0 0
25 5 25
30 10 100
35 15 225
Total 140 _ 700 N=7

x̅= ΣX/N=140/7=20
σ =√∑x2/N = σ =√700/7= 10
Hence, the standard deviation of the given
observation is 10.

8
 Example of Direct method (Discrete Series)
X 3 5 7 10 12 15 20 22 25
F 5 10 4 8 5 3 9 6 10

X F FX (X- x̅) x2 fx2

3 5 15 -11 121 605
5 10 50 -9 81 810
7 4 28 -7 49 196
10 8 80 -4 16 128
12 5 60 -2 4 20
15 3 45 1 1 3
20 9 180 6 36 324
22 6 132 8 64 384
25 10 250 11 121 1210
Total 60 840 3680

We have, x̅= ΣFX/N

= 840/60 =14
And, σ =√∑fx2/N where √∑fx2 = 3680, N= 60
σ =√3680 /60 = √61.33 = 7.831 (approx)

9
 Example of Direct method (Continuous Series)
Class 0-10 10- 20- 30- 40- 50-
20 30 40 50 60
Frequency 11 8 4 9 8 10

Class F Mid- FX (X- x̅) X2 Fx2

value x
(X)
0-10 11 5 55 -25 625 6875
10-20 8 15 120 -15 225 1800
20-30 4 25 100 -5 25 100
30-40 9 35 315 +5 25 225
40-50 8 45 360 +15 225 1800
50-60 10 55 550 +25 625 6250
Total 50 1500 17050

We have, x̅= ΣFX/N

x̅= 1500/50= 30
σ =√∑fx2/N
σ =√17050/50= √341= 18.47(approx)

10
2. Short-cut method -Under this method, the
standard deviation is computed on the basis of
the deviations of the items takes from assumed
arithmetic average. This method is suitable where
the actual arithmetic average of a series is found
to be a fractional or an infinite figure.
The formulae used under this method are as
under:
In case of Individual In case Discrete and
Series Continuous Series
σ = √[(∑d²/N) – (∑d/N)²] σ = √[(∑fd²/N) –
(∑fd²/N)²]

Where σ = standard deviation of the items.

∑d2 = sum of the squares of the deviations taken
from the assumed mean i.e. ∑(X-A) 2.
∑d = sum of the deviations taken from the
assumed mean i.e. ∑(X-A).
N = number of items.

11
∑fd2 = sum of the products of the squares of
deviations from the assumed mean and their
corresponding frequencies.
∑fd= sum of the products of the deviations from
the assumed mean and their corresponding
frequencies.
∑f = total of the frequencies or N

12
Example of short-cut method (Discrete series)
X F (X-A) d2 fd2 fd
D
8 1 -7 49 49 -7
9 2 -6 36 72 -12
15 3 0 0 0 0
23 5 8 64 320 40
5 6 -10 100 600 -60
11 7 -4 16 112 -28
19 8 4 16 128 32
8 9 -7 49 441 -63
10 10 -5 25 250 -50
12 11 -3 9 99 -33
Total N=62 2071 -181

σ = √ [(∑fd²/N) – (∑fd²/N) ²]
σ = √ [(2071/62) – (-181/62)²]
σ = √ [3.40-(-2.92) ²]
σ = √ 33.40-8.53
σ = √ 24.87= 4.99 (approx)

13
 Example of short-cut method (Continuous series)
Weight: 115- 125- 135- 145- 155- 165-
125 135 145 155 165 175
Frequency: 4 5 6 3 1 1

Weight Frequency Mid (X-A) d2 Fd2 Fd

(F) value(X) d
115-125 4 120 -20 400 1600 -80
125-135 5 130 -10 100 500 -50
135-145 6 140 0 0 0 0
145-155 3 150 +10 100 300 +30
155-165 1 160 +20 400 400 +20
165-175 1 170 +30 900 900 +30
Total N=20 3700 -50

σ = √[(∑fd²/N) – (∑fd²/N)²]
σ = √(3700/20)-(-50/20)2
σ = √185-6.25 = √178.75= 13.37(approx)
Hence, the standard deviation of distribution is
13.37

14
3. Step deviation method -This is an extension of
the shortcut method explained above. Under
method the standard deviation is computed on
the basis of the assumed deviations after they are
reduced by the greatest possible common factor.
However the derived result is again multiplied by
the said common factor to arrive at the desired
value of the standard deviation. This method is
suitable only when the assumed deviation figures
appear to be of big size and all of them can be
divided by a common factor.
The formulae under this method are thus
modified as under:
In case of Individual In case Discrete and
Series Continuous Series
σ = √[(∑d’²/N) – (∑d’/N)²]x σ = √[(∑fd’²/N) –
C (∑fd’²/N)²]x C

15
Example of step deviation method (Individual series)

X (X-A) d/c (d’)2

d d’
600 -40 -4 16
620 -20 -2 4
640 0 0 0
620 -20 -2 4
680 +40 +4 16
670 +30 +3 9
680 +40 +4 16
640 0 0 0
700 +60 +6 36
650 +10 +1 1
Total 100 10 102 N=10

Where, σ = √[(∑d’²/N) – (∑d’/N)²]x C

σ = [√(102/10)-(10/10)2] x 10
σ = √(10.2-1) x 10= √9.2 x 10
σ = 3.033 x 10= 30.33
Hence, the standard deviation of the distribution is
30.33

16
 Example of step deviation method (Discrete
series)
X F (X-A) d/c d’² fd’ fd’²
d d’
14.5 3 -30 -3 9 9 27
24.5 61 -20 -2 4 -122 244
34.5 223 -10 -1 1 -223 223
44.5 137 0 0 0 0 0
54.5 53 10 1 1 53 53
64.5 19 20 2 4 38 76
74.5 4 30 3 9 12 36
Total N=500 -2510 -251 659

We have, σ = √[(∑fd’²/N) – (∑fd’²/N)²]x C

σ = √ [(659/500) – (-251/500)²]x 10
σ = √1.318-0.252 x 10
σ = 1.032x10
σ = 10.32
Hence the value of standard deviation is 10.32

17
4. Method based on values- Under this method
the standard deviation is calculated on the basis
of the values of the exact items as the assumed
mean is here considered as zero and the
deviations are ultimately the exact values. The
formula used here are quite analogous to that of
short-cut-method. This method is suitable and
advisable only where the size of the items is short
and simple.
The formulae used under this method are as
follows:
In case of Individual In case Discrete and
Series Continuous Series
σ = √[(∑X²/N) – (∑X/N)²] σ = √[(∑FX²/N) – (∑FX/N)²]

18
 Example Method based on values (Discrete
series)
Vales F X FX FX²
0-2 2 1 2 2
2-4 7 3 21 63
4-6 12 5 60 300
6-8 19 7 133 931
8-10 9 9 81 729
10-12 1 11 11 121
Total 50 308 2146

We have, σ = √ [(∑FX²/N) – (∑FX/N)²]

σ = √ [(2146/50) – (308/50)²]
σ = √ 42.92-(6.16)²
σ = √ 42.92-37.95
σ = √ 4.97
σ = 2.23
Hence the required standard deviation is 2.23

19
 Example Method based on values (Continues series)
Value 0-2 2-4 4-6 6-8 8-10 10-12
Frequency 2 7 12 19 9 1

Vales F X FX FX2
0-2 2 1 2 2
2-4 7 3 21 63
4-6 12 5 60 300
6-8 19 7 133 931
8-10 9 9 81 729
10-12 1 11 11 121
Total 50 308 2146

Where, σ = √[(∑FX²/N) – (∑FX/N)²]

σ = √(2146/50)-(308/50)2
σ = √42.92-(6.16)2 = √ 42.92-37.95
σ =√4.97 = 2.23

20
 Relative Standard Deviation
Like any other measure of dispersion, standard
deviation can also be measured in two ways viz.:
(1) Absolute
(2) Relative
Absolute standard deviations are computed in the line
discussed above. But they are not suitable for making a
comparative study of more than one series. For this
purpose relative standard deviations are to be
computed. A relative standard deviation is again of two
types.
They are:
1) Co-efficient of standard deviation. This is expressed
as the ratio of the absolute standard deviation to the
arithmetic average of the series. This is represented as
under:
Coefficient of S.D= Standard deviation/Mean or σ= σ/
x̅

21
2) Co-efficient of variation. The co-efficient of standard
deviation thus expressed does not give the answer in a
convincing manner. To get the answer in a more
convincing manner, co-efficient of variation is found
out which is expressed as the percentage of standard
deviation of the arithmetic average of the series. Thus
it is represented as under:
C.V. = (σ/x̅) x 100
The co-efficient of variation guides us in ascertaining
the relative degree of variability or stability of a series.
A series with more co-efficient of variation is regarded
as less stable or less consistent than a series with less
co-efficient of variation. The C.V. is a pure number and
is independent of the units of measurement and is thus
suitable for comparing variability, homogeneity or
uniformity of distributions.

22
 Algebraic Properties of standard deviation
Standard deviation has a lot of algebraic properties for
which it is capable of further algebraic treatment and
considered as the best of the measures of dispersion.
Some of its algebraic properties a depicted here as
under.

1. It is independent of the change in the origin. This

means that the value of the standard deviation will
remain the same even if each of the items of a series is
added or subtracted by a constant quantity
2. It is dependent of the change in the scale. This
means that the value of the standard deviation is
multiplied or divided by the same content by which
each item of the series is multiplied or divided.
3. It is the minimum root mean square deviation
because it is calculated by the Direct Method from the
arithmetic average of a series and so,
√∑X²/N < √∑D²/N

23
4. In a symmetric and moderately asymmetric series it
maintains the empirical relation with the other
measures of dispersion as under:
a Q.D =(2 σ /3)
b M.D =(4 σ /5)
c Range =6 σ
d Q.D =(5/6)M.D

5. It determines the number of items that fall within a

specific range of a symmetrical distribution with the
following relationships.
x̅+10 = 68.27% of the total items
x̅+20 = 95.45% of the total items
x̅+30 = 99.73% of the total items
x̅+1.960 = 95% of the total items

6. It is possible to determine the standard deviation of

the first n natural numbers switch the following
formula
σ=√1/12(N²-1)

24
Thus, the standard deviation of the first 5 natural
numbers would be
σ5t=√1/12(5²-1= √1/12(24) = σ=√2=10414
7. It is possible to determine the Combined Standard
Deviation of any two or more groups

->VARIANCE (V= σ²)

The standard deviation facilitates the computation of
variance of a series which is given by V= sigma^(2).
This measure of variance is very much used in making a
comparative study of variability of different series.
->STANDARD ERROR OF THE STANDARD SEVIATION
The last algebraic property of Standard Deviation is that
is provides for the determination of the standard error
in its result also. This is given by SE σ = 0.6745 σ.

25