Measures of Central Tendency and DispersionMCQMTP June 2023 Series IIQuestion 3199 of 473
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There are two startups in ecommerce sector struggling to acquire the market. Following data is for Mean and Standard Deviation of billing amount of bought items per month on their website.Startup | A | BNo. of customers/Month | 40 | 30Mean billing amount | 2,500∣\displaystyle 2,500 |2,200SD of billing amount | 10∣\displaystyle 10 |11Which startup has a better consistency in terms of sales numbers?

Options

AStartup A
BStartup B
CBoth A and B
DNeed more information
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Correct Answer

✅ Option a — Startup A

All Options:

  • AStartup A
  • BStartup B
  • CBoth A and B
  • DNeed more information

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Detailed Solution & Explanation

**Given:** - Startup A: Mean = 2500\displaystyle 2500, SD = 10\displaystyle 10 - Startup B: Mean = 2200\displaystyle 2200, SD = 11\displaystyle 11 **Concept:** Consistency is measured by the Coefficient of Variation (CV). Lower CV = more consistent. **CV for Startup A:** CVA=SDAMeanA×100=102500×100=0.4%CV_A = \frac{SD_A}{\text{Mean}_A} \times 100 = \frac{10}{2500} \times 100 = 0.4\% **CV for Startup B:** CVB=SDBMeanB×100=112200×100=0.5%CV_B = \frac{SD_B}{\text{Mean}_B} \times 100 = \frac{11}{2200} \times 100 = 0.5\% **Comparison:** CVA(0.4%)<CVB(0.5%)\displaystyle CV_A (0.4\%) < CV_B (0.5\%) Since Startup A has a lower CV, it has **better consistency** in sales. Hence, **Option A** is the correct answer.

About This Chapter: Measures of Central Tendency and Dispersion

Paper

Paper 3: Quantitative Aptitude

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.

View Official ICAI Syllabus

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 Concepts to Understand

Standard Deviation

A measure of the dispersion or spread of values in a data set around the mean. It is the square root of Variance. A lower standard deviation indicates data points are clustered close to the mean; a higher value indicates greater spread.

Related Comparison Tables

Mean vs Median vs Mode: Measures of Central TendencyFiscal Policy vs Monetary Policy: CA Foundation Economics

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