Question

Coefficient of variation:

Calculate the coefficient of variation for the following options A-D:
Option A: expected return 10%; standard deviation 6% = ________________
Option B: expected return 12%; standard deviation 8.5% = ________________
Option C: expected return 8%; standard deviation 3% = ________________
Option D: expected return 14%; standard deviation 9% = ________________

Answer 1

To calculate the coefficient of variation, divide the standard deviation by the expected return and multiply by 100.

Step-by-step explanation:

To calculate the coefficient of variation for each option, divide the standard deviation by the expected return and then multiply by 100 to get a percentage.

Option A: Coefficient of Variation = (6% / 10%) * 100 = 60%

Option B: Coefficient of Variation = (8.5% / 12%) * 100 = 70.83%

Option C: Coefficient of Variation = (3% / 8%) * 100 = 37.5%

Option D: Coefficient of Variation = (9% / 14%) * 100 = 64.29%