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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › HOW DO I SOLVE THIS?

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- November 15, 2022 at 2:24 pm #671504
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

November 16, 2022 at 9:01 am #671582If 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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