Question

The president of a local bank thinks it might be wise to add a separate window for certain customers with longer than expected wait times. To aid her decision, she decided to analyze the standard deviation of the wait times for a random sample of customers. She randomly selected 30 customers and recorded their wait times. Should she calculate a sample standard deviation or a population standard deviation in this situation? A) Sample Standard Deviation B) Population Standard Deviation C) Both are equally appropriate D) Cannot be determined with the given information

Answer 1

The president of the local bank should calculate the sample standard deviation because she has data from a random sample of 30 customers, which is a subset of the entire customer population. Therefore correct option is A

Step-by-step explanation:

In the described scenario, the president of the local bank should calculate a sample standard deviation. Since the wait times were recorded for a random sample of 30 customers, and not all the customers of the bank, it's a subset of the total customer population. Hence, the correct approach is to use the sample standard deviation to estimate the variability within this sample, which then can be used to infer about the population variability.

The population standard deviation would only be applicable if we had the data for every single customer that ever visited the bank, which is not the case here. Therefore, when we only have data from a sample and want to make inferences about the entire population, we use the sample standard deviation.