The variance of 20 observations is 5. If each observation is multiplied by 2, find the new variance of the resulting observations.

Answer: The new variance of the resulting observations is 20.

Step-by-step solution

Step 1: Understand the given information

We are given that there are 20 observations, and their variance is 5. We need to find the new variance if each observation is multiplied by 2.

Step 2: Recall the property of variance

A key property of variance states that if each observation in a dataset is multiplied by a constant kk, the new variance will be k2k^2 times the original variance. This is because variance measures the spread of data, and multiplying by kk scales the spread by kk, so the squared spread (variance) scales by k2k^2.

Step 3: Identify the constant multiplier

In this problem, each observation is multiplied by 2. Therefore, the constant multiplier kk is 2.

Step 4: Calculate the new variance

Using the property of variance, we substitute the value of k=2k=2 and the original variance of 5 into the formula. This gives us 22×52^2 \times 5, which simplifies to 4×54 \times 5, resulting in a new variance of 20.

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