# How to Calculate Coefficient of Variation for Profit Levels

## What is the purpose of calculating the coefficient of variation?

Choose the correct answer:

a. To measure the absolute variability of a set of data

b. To measure the relative variability of a set of data

c. To determine the mean of a set of data

## Answer:

The correct answer is b. To measure the relative variability of a set of data.

The coefficient of variation measures the relative variability of a set of data. It helps in understanding the consistency or inconsistency in the variability of the data points.