CFA Practice Question
CFA Practice Question
A variable, W, is normally distributed with a mean of 12. 68% of its observations lie between 8 and 16. The coefficient of variation of W is ______.
Explanation: For a normal distribution, 68% of the observations lie within one standard deviation of the mean. Hence, the standard deviation of X equals 12-8 = 4. The coefficient of variation is then equal to standard deviation/mean = 4/12 = 0.33.
User Contributed Comments 17
|Rivermax||using the formula for the mean a+b/2
8+16 / 2 = 12
=> normal distribution mean- lower range = 12 - 8 = 4
coefficient of cariance = sd/mean = 4/12 = 0.33
|JHeld||Wow, i read this as 12.68% of all observations lie between 8-16...time for bed!|
|StanleyMo||same as me, lol.|
|Yohan3109||I thing that in a normal distribution they have 3 standard deviation in each side of the mean.
so exemple 12,68 - 16 =3,32 I think that a standard deviation equal 3,32 / 3 = 1,107
why is 4...
|thammy||JHeld and StanleyMo, I did the same too! And I thought I was going nuts.|
|kellyyang||Jheld: I read same as you 12.68%. of couse got wrong for this one.|
|boddunah||i took mean as 12.68%.i thought question did not make sense. i assumed 1 stan. deviation and got approximate answer. hope they seperate them clearly.|
|mindi||me too! the question did not make any sense to me!!!|
|Merke||Guys, these comments of reading it as 12.68% made my day :)))|
|Kathkun||guys, I cant believe so many of us made that same mistake HAHA!|
|fmhp||I also made the same mistake concerning the value of the mean. I was not told that you have to be a pretty good and careful reader to pass that exam.|
|simonbenfrech||Common sense: otherwise the coefficient of variation would be around 70...|
|Mikehuynh||SD = 4
Mean = 12
Coefficient of variation = SD/mean= 4/12= 0.333
|anele1||Also read 12.68% and was completely lost and gave up!!|
|CalebMast||I read 12.68% but guessed because each answer was in a ratio of 1/3 (even .66 is 2*(1/3)). 3 didn't make sense, and .66 seemed a little too much...feels like most of what has to happen with this exam. ("seems too much"). Either way, mean of 12 is huge...|
|Rsanches||Same mistake, read 12.68%....|
|sunday128||Bloody hell... 12.68% Really?|