CFA Practice Question

There are 410 practice questions for this study session.

CFA Practice Question

Which measure of dispersion does not disregard the algebraic signs (plus and minus) of each difference between X and the mean?
A. Standard deviation
B. Coefficient of variation
C. Mean deviation
Explanation: CV = s / X-bar, and x-bar can be negative or positive, or even 0.

The mean deviation is the mean of the absolute values of deviations from the mean.

User Contributed Comments 4

User Comment
rgat stdev is numerator of CV equation, thus signs are disregarded indirectly.
cleopatraliao because the mean would change if any observation flips the sign, that's why the cv would change if you move a positive x to negative territory.
albert9 What is the difference between standard deviation and "mean deviation"?
Krucinski Mean deviation is the average difference to the mean
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