The Coefficient of Variation for a Set of Annual Incomes

question 70

Multiple Choice

The coefficient of variation for a set of annual incomes is 18%; the coefficient of variation for the length of service with the company is 29%. What does this indicate?

• A) More dispersion in the distribution of the incomes compared with the dispersion of their length of service
• B) More dispersion in the lengths of service compared with incomes
• C) Dispersion in the two distributions (income and service) cannot be compared using percents
• D) Dispersions are equal
• E) None of the choices are correct.

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used to assess the value of future cash flows in today's dollars.

Recognition

The formal acknowledgment in accounting of a transaction or event's impact on the financial statements.