The variance of 20 observations = 5.If each observation is multiplied by 5, then the new variance will be

  1. 125
  2. 25
  3. 5
  4. Cannot be determined

Answer (Detailed Solution Below)

Option 1 : 125
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Detailed Solution

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Concept:

Multiplying every value by a constant:- however, will multiply the mean, median, quartiles, range, interquartile range, and standard deviation by that constant, and multiply the variance by the square of that constant.

Var X = 

Calculation:

Var X =  = 5

New observations = 5X1, 5X2, ...,5X20

New 

=  

= 5Xold

New Var X = 

= 25 × 

= 25 × 5

= 125

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