Question

Risk and Return	Ratio
Mean	-0.01
Sample Variance	0.04
Standard Deviation	0.20
Coefficient of Variation	-18.80

Interpret the above data; 200 words

Answer 1

The expected return of the asset is -0.01 or -1%. This means that on an average the asset provides a return of -1%. Negative sign indicates that asset is loss making. Sample variance indicates that the average variance of the sample is 0.40 and the standard deviation is the square root of variance ie. 0.20 or 20%. This indicates that the mean varies by a standard deviation of 20% above and below the mean value. The coefficient of variation is the standard deviation of returns divided by the mean returns of the asset. Lower the coefficient, better returns are for the security for the risk (standard deviation) of the asset.