Measures of Central Tendency and Dispersion
473 Practice MCQs available for CA Foundation
Paper
Paper 3: Quantitative Aptitude
Exam Weightage
12-15 Marks
Key Topics
Mean, Median, Mode, Range, Mean Deviation, Standard Deviation
The core foundation of Statistics. This chapter covers Mean (Arithmetic, Geometric, Harmonic), Median, Mode, and their properties. It also explores measures of spread like Range, Mean Deviation, Standard Deviation, and Quartile Deviation.
Exam Strategy Tip
Do not just memorize formulas; ICAI loves asking about the mathematical properties (e.g., 'sum of deviations from the AM is always zero'). You can usually eliminate 2 options just by knowing the properties.
Key Terms
Current Ratio
A liquidity ratio that measures a company's ability to pay its short-term liabilities using its short-term assets. Formula: Current Assets ÷ Current Liabilities. The ideal ratio is 2:1.
Quick Ratio
A stringent liquidity ratio (also called Acid-Test Ratio) that measures the ability to meet short-term obligations using only the most liquid assets, excluding inventories and prepaid expenses. Formula: (Current Assets − Stock − Prepaid Expenses) ÷ Current Liabilities. Ideal is 1:1.
Income Elasticity of Demand
Measures the responsiveness of quantity demanded to a change in consumer income. Formula: YED = % Change in Quantity Demanded / % Change in Income. Positive YED indicates a normal good; negative YED indicates an inferior good.
Cross Elasticity of Demand
Measures the responsiveness of the quantity demanded of one good (X) to a change in the price of another good (Y). Formula: XED = % Change in QD of X / % Change in Price of Y. Positive XED → substitutes; Negative XED → complements.
Comparison Tables
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