Question 5 of Practice Exam:2
If Sample Dataset 2 represents a list of sample means, then the Standard error equals the standard deviation of the sample distribution (as is explained in the answer). The standard deviation of the distribution formed by sample means is 2620. Why do we need to divide this number by square root of number of sample means?
Because we need to find the standard error of the SAMPLING DISTRIBUTION. Imagine that sample means in sheet are the observations from a population (of sample means) then the standard errror will be standard deviation of this population divided by square root of 'sample of sample means' size. The standard deviation of population of sample means is not known but it is estimated by sample standard deviation of sample of sample means. Using this, standard error is found.
Just consider that you are dealing with observations from a population.