Free CFA Level I Flashcards

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Calculate and interpret measures of dispersion.


The range is the difference between the largest and smallest values in a data set.
Mean absolute deviation (MAD) is the average of the absolute values of the deviations from the arithmetic mean:

Variance is defined as the mean of the squared deviations from the arithmetic mean or from the expected value of a distribution:
Sample variance = s2 = where X = sample mean and n = sample size 9.
Standard deviation is the positive square root of the variance and is frequently used as a quantitative measure of risk.
The coefficient of variation for sample data, CV = s / X , is the ratio of the standard deviation of the sample to its mean (expected value of the underlying distribution).

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