What best describes coefficient of variation?

The coefficient of variation is defined as the ratio of the standard deviation to the mean, often expressed as a percentage. This statistical measure provides insight into the relative variability of the data in relation to its mean. When calculating the coefficient of variation, one first computes the standard deviation, which quantifies the amount of variation or dispersion of a set of values in a dataset. By dividing this standard deviation by the mean, we obtain a value that indicates how much variability exists in relation to the average outcome. This is particularly useful when comparing data sets with different units or vastly different means, allowing for a standardized measure of relative variability.

In contrast, the other options do not correctly describe the coefficient of variation. The second option relates to calculating an average value across total observations rather than a measure of variability. The third option introduces variance, which is the square of the standard deviation, and it does not relate directly to the mean in a way that defines the coefficient of variation. Finally, the last option suggests dividing the standard deviation by total observations, which does not reflect the intended measurement of relative variability, since the measure should relate to the mean, not the number of observations.