How Do You Calculate Standard Deviation for Linear Combinations?

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SUMMARY

The calculation of standard deviation for the linear combination D = A - B - C was discussed, with expected values E(A) = 10, E(B) = 2, E(C) = 2, and standard deviations sigma(A) = 0.1, sigma(B) = 0.05, sigma(C) = 0.1. The variance was computed as V(D) = sigma(A)^2 + sigma(B)^2 + sigma(C)^2 = (0.1^2) + (0.05^2) + (0.1^2) = 0.0225, leading to a standard deviation of sigma(D) = 0.15. The discrepancy with the book's answer of 0.1225 was noted, with participants agreeing on the correctness of the calculated standard deviation.

PREREQUISITES
  • Understanding of basic statistics, specifically variance and standard deviation
  • Familiarity with linear combinations in probability
  • Knowledge of expected values (E) in statistical calculations
  • Ability to perform basic arithmetic operations with exponents
NEXT STEPS
  • Review the properties of variance in linear combinations of random variables
  • Study the derivation of standard deviation from variance
  • Explore statistical textbooks or resources that clarify common misconceptions in standard deviation calculations
  • Practice calculating standard deviation for various linear combinations with different parameters
USEFUL FOR

Students and professionals in statistics, data analysis, and quantitative research who need to accurately calculate standard deviations for linear combinations of variables.

doubled
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I have attached the problem of interest.
I think I am having trouble calculating the standard deviation for part a.

D=A-B-C
E(A)=10 E(B)=2 E(C)=2 sigma(A)=0.1 sigma(B)=0.05 sigma(C)=0.1
where sigma=standard deviation

so to find SD...:
V(D)=V(A-B-C)=sigma(A)2+sigma(B)2+sigma(C)2=(0.1^2)+(0.05^2)+(0.1^2)=0.0225
sigma(D)=(V(D))^0.5=0.0225^0.5=0.15

The book's answer is 0.1225. I do not see any glaring mistakes. Could someone please take a look?
The book may be wrong. I just want to make sure that it is not me that's wrong.
 

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doubled said:
I have attached the problem of interest.
I think I am having trouble calculating the standard deviation for part a.

D=A-B-C
E(A)=10 E(B)=2 E(C)=2 sigma(A)=0.1 sigma(B)=0.05 sigma(C)=0.1
where sigma=standard deviation

so to find SD...:
V(D)=V(A-B-C)=sigma(A)2+sigma(B)2+sigma(C)2=(0.1^2)+(0.05^2)+(0.1^2)=0.0225
sigma(D)=(V(D))^0.5=0.0225^0.5=0.15

The book's answer is 0.1225. I do not see any glaring mistakes. Could someone please take a look?
The book may be wrong. I just want to make sure that it is not me that's wrong.
I agree with your answer.
 
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Likes   Reactions: 1 person

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