How to Calculate Coefficient of Variation for Profit Levels
What is the purpose of calculating the coefficient of variation?
Choose the correct answer:
a. To measure the absolute variability of a set of data
b. To measure the relative variability of a set of data
c. To determine the mean of a set of data
Answer:
The correct answer is b. To measure the relative variability of a set of data.
The coefficient of variation measures the relative variability of a set of data. It helps in understanding the consistency or inconsistency in the variability of the data points.