dtweah wrote:
The reasoning for the answer being E is not b/c the difference between the added data points and the mean is the least possible.
manu's reasoning above was perfectly valid. Perhaps it would be more clear to say 'positive difference', or 'distance', rather than simply 'difference', but the logic was otherwise fine.
In general, when thinking about standard deviation, you should think in terms of distances to the mean, and not differences from the mean; otherwise you might be distracted by negative signs that aren't at all important. That is, if you're looking at this set: {1, 2, 3, 4, 5}, if you calculate the difference ("mean - x") for each x in the set, some of these differences will be positive, some negative. Those negative signs aren't important, since standard deviation is only based on distances from each element to the average - you can feed the numbers 2, 1, 0, 1, 2 into the standard deviation calculation to get the correct answer. Mind you, I've yet to see a real GMAT question that requires you to calculate standard deviation.
dtweah wrote:
SD:( ((1- 1/3)^2 +(1- 1/3)^2) + (-1-1/3)^2)/3)^.5
Now the point I am making can be seen in the third parenthesis above. -1-1/3 is the least of corresponding expressions without squaring them. But you cannot say so when we square them.
((2/3)^2 + (2/3)^2 + (4/3)^2)/3)^.5
(4/3)^2 > (2/3)^2
SD in this case = 1.632
Not sure how you got 1.632 here. The standard deviation of {-1, 1, 1} is:
sqrt[(4/9 + 4/9 + 16/9)/3] = sqrt(8/9) = [2*sqrt(2)]/3, which is certainly less than 1.