Random Variable Coefficient of Variation - CFA® Level 1: Test Prep

Coefficient of Variation for Random Variable with Mean and Standard Deviation - CFA® Level 1: Test Prep

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Question

A random variable with a mean equal to 2.5 and a standard deviation of 2.0 has a coefficient of variation equal to ________.

Answers

Explanations

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A. B. C. D. E.

E

The coefficient of variation equals the ratio of the standard deviation to the mean.

The coefficient of variation (CV) is a statistical measure used to compare the variability of different random variables relative to their means. It is calculated as the ratio of the standard deviation to the mean, expressed as a percentage.

In this case, we are given a random variable with a mean of 2.5 and a standard deviation of 2.0. To calculate the coefficient of variation, we divide the standard deviation by the mean and multiply by 100 to express it as a percentage.

CV = (standard deviation / mean) * 100

CV = (2.0 / 2.5) * 100

CV = 0.8 * 100

CV = 80

Therefore, the coefficient of variation is 80. However, none of the given answer choices matches this value. The correct answer would be D. none of these answers.

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