Jason is a Black Belt practitioner who is commissioned to compare the variations in Stocks A and B. Stock A has an average price of $80 with a standard deviation of $8 while Stock B has an average price of $120 with a standard deviation of $6. What is the variation of both Stocks A and B?

Question

Quizplus · Accepted Answer

The variation of Stock A is 10% and the variation of Stock B is 5%.
Key Takeaway: The Coefficient of Variation measures the variation of a data set around the mean. This allows the comparison of two data values or sets such as Stocks A and B. To calculate variation, the following formula is used:
Stock A: CV = ($8/$80) * 100% = 10%
Stock B: CV = ($6/$120) * 100% = 5%

Jason Is a Black Belt Practitioner Who Is Commissioned to Compare