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A large publishing company awards a 14% salary increase to every employee.
Which of the following statements about the distribution of the company’s salaries is/are correct?
1 The standard deviation will remain unaltered
2 The standard deviation will increase by 14%
3 The coefficient of variation will remain unaltered
? 1 and 2 only
? 1 and 3 only
? 2 and 3 only
? 1, 2 and 3can u explain this please
If everybody’s salary increases by 14% then the mean will also increase by 14%.
All of the variations from the mean will also increase by 14%, and so the standard deviation will increase by 14% (so statement 2 is correct).
The coefficient of variation is the standard deviation divided by the mean. So if they both increase by 14% it will remain the same (so statement 3 is correct also).
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