Question

Levine Inc. is considering an investment that has an expected return of 15% and a standard deviation of 10%. What is the investment's coefficient of variation?

a. 0.67
b. 0.73
c. 0.81
d. 0.89
e. 0.98

Answer 1

A)0.67

Step-by-step explanation:

Coefficient of variation can be regarded as the method that is usually devices in the assessment of the total risk per unit of return in a particular investment.

To calculate the investment's coefficient of variation, we use the expresion below

Coefficient of variation = standard deviation/expected return.

Given:

expected return = 15%

standard deviation = 10%.

Coefficient of variation =10/15

= 0.67

Hence, the investment's coefficient of variation is 0.67