See photo ) The data set on the left represents the annual rate of return (in percent) of eight randomly sampled bond mutual funds, and the data set on the right represents the annual rate of return (in percent) of eight randomly sampled stock mutual funds. The coefficient of variation, CV, is defined as the ratio of the standard deviation to the mean of a data set, so CV = standard deviation/mean The coefficient of variation is unitless and allows for comparison in spread between two data sets by describing the amount of spread per unit mean. After all, larger numbers will likely have a larger standard deviation simply due to the size of the numbers. Compute the
(See photo ) The data set on the left represents the annual rate of return (in percent) of eight randomly sampled bond mutual funds, and the data set on the right represents the annual rate of return (in percent) of eight randomly sampled stock mutual funds.
The coefficient of variation, CV, is defined as the ratio of the standard deviation to the mean of a data set, so CV = standard deviation/mean
The coefficient of variation is unitless and allows for comparison in spread between two data sets by describing the amount of spread per unit mean. After all, larger numbers will likely have a larger standard deviation simply due to the size of the numbers. Compute the coefficient of variation for both data sets. Which data set do you believe has more “spread?”
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