Question

Bae Inc. is considering an investment that has an expected return of 45% and a standard deviation of 10%. What is the investment's coefficient of variation? Do not round your intermediate calculations. Round the final answer to 2 decimal places.

Answer 1

Answer: Investment's coefficient of variation is 0.22.

Explanation:

Since we have given that

Expected return = 45%

Standard deviation = 10%

We need to find the coefficient of variation.

So, Coefficient of variation is given by

`(standard\ deviation)/(Expected\ return)\\\\=(0.10)/(0.45)\\\\=0.22`

Hence, investment's coefficient of variation is 0.22.