You are provided the following information about three stocks on a stand alone basis.
| Expected | Standard | Riskless | |
| Stock | Return | Deviation | Return |
| A | 10% | 20% | 3.50% |
| B | 12% | 25% | 3.50% |
| C | 14% | 16% | 3.50% |
Calculate the coefficient of variation for Stock C. Round your answer to the second decimal place
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Answer:
coefficient of variation=standard deviation/expexted
return
The coefficient of variation represents the ratio of the standard
deviation to the mean, and it is a useful statistic for comparing
the degree of variation from one data series to another, even if
the means are drastically different from each other.
For Stock C has a 14.0% expected return and S.D is 16%
= 0.16/0.14*100
= 1.14
Note: if percentage is asked it is 114.29%
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