Question

What practical applications does knowing the spread of a distribution have? When would a large/small spread be good or bad? Please give an example.

Answer 1

If there was, say, a gambling game, then a small spread would mean the result would be very close to the mean-the “odds” of getting the right result are high while a large spread would mean they were low. If a manufacturer want the size of an object to be at, or close to, a given value, a small spread would mean most are close while a large spread would mean many are well of the desired size. In general a small spread means that there is less “chance” involved than a large spread.