• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Standardised Deviation in Binomial Framework

V

Viki2010

Member
I have observed in various exc. that Zx is computed with an application of a shortcut for sigma = standard deviation which is a square root of Ex * qx instead of the full formula of square root of Ex * qx * (1-qx).

I am just wandering if this approximation will always be acceptable on the exam? Just wandering if that could be a source of loss of marks in the situation when some people compute full formula and some an approximation which is quicker.
 
Hi Viki2010,

Excellent question!

Really, it depends which test you're doing.

You're spot on, if we are doing the ISD test then the s.d. is sqrt of Ex * qx *(1 - qx)

I have never seen this be a problem in the exam but, if you were worried that the qx's were not small enough to say 1 - qx = 1 then, you should do it properly as you suggest - you would get full marks for this and the worst case scenario would be the slight loss of time. I am 99.99% certain that you would be OK just saying that 1- qx = 1 since qx's are small and using sqrt of Ex * qx

However, careful! If we're doing the Chi-squared test then this is (A - E) ^2 / E and so you have to use sqrt of Ex * qx on the denominator before you square the Zx's

Good luck!
John
 
You must log in or register to reply here.
Back
Top