Skip to content

CA Foundation · Quantitative Aptitude · Measures of Central Tendency and Dispersion

Two Chennai firms report monthly profits. Firm P: mean ₹80,000, SD ₹12,000. Firm Q: mean ₹50,000, SD ₹9,000. Which statement is correct?

Firm P has the larger absolute dispersion (SD ₹12,000 against ₹9,000), but Firm Q has the larger relative dispersion, with CV of 18% against 15% for P. Relative variability is judged by the coefficient of variation, not by the SD alone.

  1. AFirm P has greater absolute dispersion and greater relative dispersion
  2. BFirm Q has greater absolute dispersion and greater relative dispersion
  3. CFirm P has greater absolute dispersion, but Firm Q has greater relative dispersionCorrect
  4. DFirm Q has greater absolute dispersion, but Firm P has greater relative dispersion

Explanation

Absolute dispersion is the SD: 12,000 for P is more than 9,000 for Q. CV of P = 12,000/80,000 × 100 = 15%; CV of Q = 9,000/50,000 × 100 = 18%. So Q is relatively more variable; comparing only SDs would wrongly point to P.

Did you get it right without looking?

One question tells you little. A timed set on Measures of Central Tendency and Dispersion shows your real accuracy, how long you take and where you lose marks.

Practise Measures of Central Tendency and DispersionFree diagnostic mock

More Measures of Central Tendency and Dispersion questions