BE PREPARED ON THE SERIES 66 EXAM TO ANSWER QUESTIONS ABOUT STANDARD DEVIATION

Taking the Series 66 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 66 Test Specifications indicate in Section I (A) (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:

PRACTICE QUESTION

Professor Mayer has only five students in his finance class. On a weekly 10-question quiz dealing with unethical practices, the scores are 10, 8.5, 3, 6 and 7.5. Which of 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 66 Exam. Here is a sample of Bob Eder's treatment:

EXAMPLE

In a college course on accounting, there are only five 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 the standard deviation, first obtain the mean or average of all of the scores or data points. Adding the five scores together, we obtain 367. Now divide 367 by five to obtain the mean or average of 73.4. Next subtract 73.4 from each of the five scores—thus, we obtain 1.6, 10.6, -12.4, 18.6, -18.4. Square all these differences—2.56, 112.36, 153.76, 345.96, 338.56. Take the mean of these squared differences—953.2 divided by five, or 190.64. Now take the square root of 190.64. This equals 13.807, the standard deviation.

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

To compute standard deviation, first find the mean or average of the five scores, 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 Test Specifications for the Series 66 Exam. 

Study for the Series 66 Exam is available from Amazon in both paperback and Kindle e-book versions. Here is the link to Bob Eder's Series 66 book on Amazon. 

For questions about Bob Eder's Series 66 Manual, Study for the Series 66 Exam, or questions in general about the Series 66 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.