Suppose the true average salary in Germany is 26400 Euros In

Suppose the true average salary in Germany is 26,400 Euros. In what units will the variance of German salaries be measured? In what units will the standard deviation of German salaries be measured? Why do we care?

Solution

Variance will be in Euros-squared. Standard deviation will be in Euros. Both mean and standard deviation are in Euros, and thus it is simple to convert mean and standard deviation into other currencies by simply mulstiplying the foreign exchange factor.