Question

Digital Technology wishes to determine its coefficient of variation as a company over time. The firm projects the following data (in millions of dollars):

Year	Profits: Expected Value			Standard Deviation
1	$	99		$	39
3		146			63
6		221			112
9		250			158

a. Compute the coefficient of variation (V) for each time period. (Round your answers to 3 decimal places.)

Year	Coefficient of Variation
1
3
6
9

b. Does the risk (V) appear to be increasing over a period of time?

Answer 1

Ans a	Year	Expected value(Mean)	Standard deviation	Coefficient of variation
	1	99	39	39.394%
	3	146	63	43.151%
	6	221	112	50.679%
	9	250	158	63.200%
		Coefficient of variation=	SD/Mean*100
Ans b.	Coefficiant of variation explains the risk in terms of its return.
	So yes we observe that the risk is increasing over the period of time given the returns as predicted by coefficient of variation shown in the above table.