The variance of 20 observations is 5. If each observation is multiplied by 2. Find the variance of the resulting observations.
Let the observations are x1, x2, x3, x4, …, x20
and Let mean =
Given: Variance = 5 and n = 20
We know that,
Putting the given values, we get
or …(i)
It is given that each observation is multiplied by 2, we get new observations
Let the new observation be y1, y2, y3, …, y20
where yi = 2(xi) …(ii)
or …(iii)
Now, we find the variance of new observations
Now, we calculate the value of
We know that,
[from eq. (ii)]
…(iv)
Putting the value of eq. (iii) and (iv) in eq. (i), we get
So,
= 20