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in Economics by (70.4k points)
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Price fluctuations of two shares A and B are given below, which type of share has more relative variation in its price?

Price (₹) share A 321 322 325 322 324 320 323 316 319 318
Price (₹) share B 141 146 130 146 142 145 132 134 132 152

1 Answer

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Best answer

To determine which share price has more relative variation, we calculate coefficient of variation of prices of share A and share B.

Share A

Mean:

x̄ = \(\frac{Σx}{n}=\frac{3210}{10}\) = ₹ 321

Standard deviation:

s = \(\sqrt\frac{Σ(x−\bar x)^2}{n}\)

\(\sqrt\frac{70}{10}\)

= √7

= ₹ 2.65

Coefficient of variation:

Variation = \(\frac{s}{\bar x}\) × 100

\(\frac{7.14}{140}\) × 100

= 0.051 × 100

= 5.1%

Coefficient of variation of price of share A 0.83% and that of share B it is 5.1%. Hence, the relative measure of variation is more in the price of share B.

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