Question

b) The variation of incomes of executives is to be compared with the variation of incomes of unskilled employees. For a sample of executives, mean = Ksh 500,000 and Standard deviation = Ksh 50,000. For a sample of unskilled employees, the mean = Ksh 12,000 and standard deviation = Ksh 2000. Is the variation among the executives greater than the variation among the unskilled employees? Justify you answer.

Answer 1

Answer to Question #85646 – Math – Statistics and Probability

Coefficient of variation = $\frac{\sigma}{\mu} \times 100\%$, where $\sigma$ is standard deviation and $\mu$ is mean

Coefficient of variation of income for executives = $\frac{50000}{500000} \times 100\% = 10\%$

Coefficient of variation of income for unskilled employees = $\frac{2000}{12000} \times 100\% = 16.67\%$

From the above calculation it is clear that the variation among the executives is NOT greater than the variation among the unskilled employees.

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