How is the coefficient of variation function calculated?

The coefficient of variation (CV) is a statistical measure used to assess the relative variability of a dataset in relation to its mean. It is calculated by taking the standard deviation of the dataset and dividing it by the mean, then often expressed as a percentage. This ratio provides insight into the degree of variation in comparison to the average value, making it useful for comparing the extent of variability between datasets with different units or vastly different means.

This method of calculating the CV allows analysts to understand how much relative variation exists compared to the expected average, facilitating better decision-making processes in various fields, such as finance, research, and quality control.

The other options do not represent the correct calculation of the coefficient of variation. The ratio of the mean to the median does not provide any indication of relative variability. The average of absolute values does not take into account the overall distribution of values in the dataset. Similarly, the sum of all data values does not offer insights into variability in relation to the mean, making them unsuitable choices in understanding how to analyze relative variability effectively.