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Arithmetic Mean by Deviation Method

Share price o...

Question

Share price of a MRF stock through a week is varying as ₹34232 , ₹44532 , ₹23442 , ₹54433 , ₹42221 , ₹53222 and ₹34632. Find the average share price of the stock by deviation method.

A

41187.71

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B

411871.1

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C

41287.71

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D

41387.71

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Solution

The correct option is A 41187.71
Observations of the data = 34232 , 44532 , 23442 , 54433 , 42221 , 53222 , 36232.

Let ,
Assumed mean or estimated mean = 34232.

$Arithmetic mean = Assumed mean + \frac{Sum of deviations}{Number of Observations}$ .
=A + $\frac{Σ (X i - A)}{N}$ .

=34232 + $\frac{(34232 - 34232) + (44532 - 34232) + (23442 - 34232) + (54433 - 34232) + (42221 - 34232) + (53222 - 34232) + (36232 - 34232)}{5}$ .

= 30 + $\frac{(0) + (10300) + (- 10790) + (20201) + (7989) + (18990) + (2000)}{7}$ .
= 34232 + $\frac{48690}{7}$ = 41187.71

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