168k views
5 votes
What is the standard deviation (also known as historical volatility)?

1) A measure of the dispersion of a set of data points from its mean
2) A measure of the average of a set of data points
3) A measure of the central tendency of a set of data points
4) A measure of the spread between the highest and lowest values in a set of data points

User Riadh
by
7.7k points

1 Answer

0 votes

Final answer:

The standard deviation is a measure of how dispersed or spread out data points are from the mean of a dataset. A small standard deviation indicates that data points are generally close to the mean, whereas a large standard deviation shows more spread and variability. To address the question at hand, the standard deviation is: 1) A measure of the dispersion of a set of data points from its mean.

Step-by-step explanation:

Understanding Standard Deviation

The standard deviation is a statistical measure that quantifies the amount of variation or dispersion of a set of data points. Specifically, it illustrates how much the individual data points in a dataset deviate from the dataset's mean. When the standard deviation is zero, it indicates that all data values are identical. A small standard deviation suggests that the data points tend to be close to the mean, showing little variability. Conversely, a larger standard deviation indicates that the data values are more spread out, which reflects greater variability.

To address the question at hand, the standard deviation is: 1) A measure of the dispersion of a set of data points from its mean. This measurement is crucial because it can be used to determine the extent to which a particular data point is close to or far from the average of the data set.

User Idfah
by
7.7k points