BE PREPARED ON THE SERIES 65 EXAM TO ANSWER QUESTIONS ABOUT STANDARD DEVIATION

Taking the Series 65 in the near future? If so, be prepared to answer questions on and about standard deviation. How do I know this? I know this because NASAA's Series 65 Test Specifications indicate in Section I (C) (2) that you as a test candidate should be familiar with standard deviation.

Here is a example of a question asking you to solve for standard deviation:

PRACTICEQUESTION

Professor Mayerhas only five students in his finance class. On a weekly 10-question quizdealing with unethical practices, the scores are 10, 8.5, 3, 6 and 7.5. Whichof the following is the standard deviation for these scores?

a.                  1.253

b.                  2.387

c.                   3.457

d.                  4.212

Bob Eder treats standard deviation in his Study for the Series 65 Exam. Here is a sample of Bob Eder's treatment:

EXAMPLE

In a college course on accounting, there are onlyfive students. Their scores on a quiz on balance sheet ratios were—75, 84, 61,92, 55. Professor Hendricks wants to find the standard deviation. To find thestandard deviation, first obtain the mean or average of all of the scores ordata points. Adding the five scores together, we obtain 367. Now divide 367 byfive to obtain the mean or average of 73.4. Next subtract 73.4 from each of thefive scores—thus, we obtain 1.6, 10.6, -12.4, 18.6, -18.4. Square all thesedifferences—2.56, 112.36, 153.76, 345.96, 338.56. Take the mean of thesesquared differences—953.2 divided by five, or 190.64. Now take the square rootof 190.64. This equals 13.807, the standard deviation.

So in the Practice Question involving Professor Mayer above, the answer is (b). To solve for standard deviation, here's how:

To compute standard deviation, first find the mean or average of the fivescores, by adding the five scores and dividing by the number of scores. Thus, obtain the average or mean by dividing 35 by 5. This equals 7 as the mean. Next, subtract 7 from each score. Thus,we have 3, 1.5, -4, -1, and .5. Next square these differences. We arrive at 9,2.25, 16, 1 and .25. Now calculate the mean of these squared differences, or 28.5 divided by 5. The average or mean is thus 5.70. Finally, take the square root of the mean,5.70. So, the square root of 5.70 equals 2.387, the standard deviation.

Here is the link to NASAA's new Series 65 Test Specifications. 

Study for the Series 65 Exam is available from Amazon in both paperback and Kindle e-book versions. Here is the link to Bob Eder's book on Amazon.

For questions about Bob Eder's Series 65 manual,  Study for the Series 65 Exam,  or questions in general about the Series 65 Exam, or about Standard Deviation, feel free to email Bob Eder at bobeder@bobeder.net.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law, in 2001. See Bob Eder's Author Page on Amazon.com.