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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Standard deviation

- This topic has 1 reply, 2 voices, and was last updated 2 years ago by John Moffat.

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- August 31, 2021 at 8:06 am #633597
Dear sir

We need to calculate the coefficient of variation only because to know whether there is %change in the mean value happening again or not .

Because if the coefficient of variation is 0%

Then the same mean value will be predicted to be happening againAnd if the coefficient of variation is 1% or more that denotes that

There might be a difference in the mean value in the next period

Am I correct sir

August 31, 2021 at 8:48 am #633614It is simply relating the two together for better comparison. If all the values in the distribution are high, then the mean and the standard deviation will both be high. If all the values in the distribution are low then the mean and the standard deviation will both be low.

The greater the coefficient of variation then the greater the spread about the mean. The lower the coefficient of variation then the lower the spread. 0% would mean there was no spread at all. (1% is of no special relevance).

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