Distributions and Coefficients of Variation in CFA Level 1 Exam

Standard Deviation of Y in CFA Level 1 Exam

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Question

Distributions X and Y have the same coefficients of variation. If the mean of X is twice the mean of Y and the standard deviation of X is 5, the standard deviation of

Y is ________.

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A. B. C. D.

C

coefficient of variation = standard deviation/mean. If the mean of Y is M, then the coefficient of variation of X is 5/(2M) and that of Y is (standard deviation of Y)/M.

Given that these two are equal, 5/(2M) = (standard deviation of Y)/M. Therefore, standard deviation of Y = 5/2 = 2.5.