Answer to Question #4348 in Statistics and Probability for Vetal Sangari

Question

Q2. (a) Under what circumstances would you consider the coefficient of variation to be
more useful than the standard deviation in comparing variability of two or more distributions?
(b) You run businesses in different parts of the World. Data available to you indicate that your businesses in Japan, USA, and Nigeria are underperforming. You have become so risk-averse that you plan to close two of the three businesses in Japan, USA and Nigeria.
Which of the two will you close if all the data available to you is as shown below?
Monthly Profits of My Businesses in Three Countries
Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Japan (¥’000)
12
108
-18
25
37
270
370
190
28
25
15
10
USA ($’000)
-20
291
10
5
120
110
12
-50
21
-29
-37
5
Nigeria (N’000)
-110
-105
20
49
100
150
60
38
20
10
10
2