Hi nikhilgmat31,
The GMAT will never ask you to actually calculate a Standard Deviation; instead, you're expected to understand the general concepts behind the subject (and you'll be asked a question - likely just 1 on Test Day - about that general knowledge). In real basic terms, SD is about how 'spread out' a group of numbers is. The 'closer' the numbers are together, the smaller the SD; the 'further apart' the numbers are, the higher the SD.
From this group of numbers, you should see (rather quickly) that there are 2 of each integer and 1 unknown. The question asks for the value of that unknown that will MOST increase the SD of the group. Mitch and Brent have both properly explained how to get to the correct answer, so I won't rehash that work here. Instead, here's how you can eliminate answer choices for NOT creating the highest SD.
With the 8 integer values that we're given, the average is 3.5 (the values 'balance' around that number). Including another 3 or another 4 would have the SAME effect on the SD (they would both introduce a value that is the SAME 'distance' from the average), so neither of those answers could create the highest SD (the net result would be the SAME). That same pattern occurs when we consider including another 2 or another 5 - each of those values is the SAME distance from the average, so each of their impacts on the SD would be the SAME. Thus, neither of those could create the highest SD.
There's only one answer remaining...
Final Answer: A
GMAT assassins aren't born, they're made,
Rich