CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

If a constant were to be added to a set of scores, the standard deviation would ______
A. remain the same.
B. increase by the square root of that constant.
C. increase by the magnitude of that constant.

User Contributed Comments 3

User Comment
tenny45 if you review the notes you'll see that it mentions when a constant is added to standard deviation, st. dev stays the same; however, if the set of data is multiplied by a constant, then the st. dev also changes.
homersimpson thanks tenny! i was trying to recall that part
7Ricky If your set of scores are 5,10,15. Your Mean is 10, Sample Variance 25, Sample Deviation 5.
If you multiply instead of adding the set by constant "2" you know have 10,20,30. New Mean of 20, Sample Variance 100, Sample Deviation 10
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