The coefficient of variation for a set of annual incomes is 18%; the coefficient of variation for the length of service with the company is 29%. What does this indicate?
A) More dispersion in the distribution of the incomes compared with the dispersion of their length of service
B) More dispersion in the lengths of service compared with incomes
C) Dispersion in the two distributions (income and service) cannot be compared using percents
D) Dispersions are equal

Question

Quizplus · Accepted Answer

The coefficient of variation is a measure of relative variability that shows the extent of variability in relation to the mean of the population. A higher coefficient of variation (29% for length of service) indicates more dispersion compared to a lower coefficient of variation (18% for incomes), meaning there is more variability in the lengths of service compared to the variability in incomes.

The Coefficient of Variation for a Set of Annual Incomes