The arithmetic mean of 100 observations is 50. If 5 is subtracted from each observation and then divided by 20, then what is the new arithmetic mean?

  1. A. 2.25
  2. B. 3.5
  3. C. 4.25
  4. D. 5.5

Correct Answer: A. 2.25

Explanation

If a constant a is subtracted from each observation and divided by b, the new mean transforms in the same way. New Mean = \frac{\text{Old Mean} - 5}{20} = \frac{50 - 5}{20} = \frac{45}{20} = 2.25.

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