A study of business faculty in Ontario revealed that the arithmetic mean annual salary is $62,000 and a standard deviation of $3,000. The study also showed that the faculty had been employed an average (arithmetic mean) of 15 years with a standard deviation of 4 years. How does the relative dispersion in the distribution of salaries compare with that of the lengths of service?
A) Salaries about 100%, service about 50%
B) Salaries about 5%, service about 27%
C) Salaries about 42%, service about 81%
D) Salaries about 2%, service about 6%

Question

Quizplus · Accepted Answer

The relative dispersion is measured by the coefficient of variation (CV), which is the ratio of the standard deviation to the mean. For salaries, the CV is 3000/62000 = 0.0484, or about 5%. For lengths of service, the CV is 4/15 = 0.267, or about 27%. Therefore, the relative dispersion in the distribution of salaries is about 5%, while that of the lengths of service is about 27%.

A Study of Business Faculty in Ontario Revealed That the Arithmetic