Which measure of central tendency is defined as the sum of all values divided by the number of observations?

Study for the National Alliance Risk Management Exam. Dive into flashcards and multiple-choice questions, each complete with hints and explanations. Prepare thoroughly for your exam!

The mean is defined as the sum of all values in a dataset divided by the number of observations. This measure provides a central value that represents the overall trend of the data. It is particularly useful in quantitative data analysis, as it takes into account every individual data point in the calculation, providing a comprehensive view of the dataset.

In contrast to the mean, the mode identifies the most frequently occurring value in the dataset, and the median represents the middle value when the data is arranged in order. The standard deviation measures the amount of variation or dispersion in a set of values but does not provide a measure of central tendency. Therefore, the mean effectively captures the average of a dataset, making it the appropriate answer for this question.

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