Practice Quiz

Six Sigma Green Belt

Category - Black Belt

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Jason is a Black Belt practitioner who is commissioned to compare the variations in Stocks A and B. Stock A has an average price of $80 with a standard deviation of $8 while Stock B has an average price of $120 with a standard deviation of $6. What is the variation of both Stocks A and B?
  1. 8%; 12%
  2. 10%; 5%
  3. 5%; 10%
  4. 8%; 3%
Explanation
Answer: B - The variation of Stock A is 10% and the variation of Stock B is 5%.

Key Takeaway: The Coefficient of Variation measures the variation of a data set around the mean. This allows the comparison of two data values or sets such as Stocks A and B. To calculate variation, the following formula is used:

Stock A: CV = ($8/$80) * 100% = 10%
Stock B: CV = ($6/$120) * 100% = 5%
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