Download Example 7 Compute the Sample Variance and

Example 7
Compute the Sample Variance and Sample Standard
Deviation
The table below shows the dividend yields of six companies in the New
York Stock Exchange energy sector.
Company
Dividend Yield
July 2012 (%)
BP
4.80
Chevron
3.41
Exxon Mobil
2.66
PetroChina
3.50
Petroleo Brasiliero
1.20
Royal Dutch Shell
4.30
a. Find the sample mean.
Solution Use the AVERAGE command in Excel to compute the mean.
1. Enter the data from the table
into the different cells in Excel.
2. In cell A9, type Mean to
indicate that the number in B9
will be the mean.
3. Click on cell B9. This is where
we will place the mean of the
data.
4. Type =AVERAGE( as shown to
the right.
5. To indicate the location of the
data, type B2:B7. You can also
click in cell B2, hold the left
mouse button down and drag
the cursor to cell B7.
6. Type ) to complete the
command. 7. Press Enter to compute the
mean. b. Find the sample variance.
Solution Use the VAR.S command to compute the sample variance of
the data.
8. Type Variance in cell A10.
9. Since we need the sample
variance, type =VAR.S( in cell
B10. If you were calculating the
population variance, you would
use the VAR.P command.
Versions of Excel older than
2010 write these commands as
VARS and VARP.
10. Type B2:B7 or drag select
these cells to identify the
location of the data. 11. Press Enter to compute the
sample variance. c. Find the sample standard deviation.
Solution Use the STDEV.S command to find the sample standard
deviation of the data.
12. In cell A11, type Standard
Deviation. 13. In cell B11, type STDEV.S( . 14. Type B2:B7 or drag select
these cells to identify the
location of the data. To
compute the population
standard deviation, you would
use the command STDEV.P. In
versions of Excel older than
2010, these commands are
STDEV and STDEVP. 15. Type ) to complete the
command. 16. Press Enter to compute the
sample standard deviation.