Question

Compare the volatility of the following two stocks (which stock is more variable). Stock A: Average...

Compare the volatility of the following two stocks (which stock is more variable).

Stock A: Average Price = 55 AED and variance = 16 AED

Stock B: Average Price = 90 AED and variance= 33 AED

Math   Statistics-And-Probability   
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Answer #1

The group having more coefficient of variation (C. V.) will be more variable.

=standard deviation

= mean of x

Stock A: Average Price = = 55 AED and variance == 16 AED

Stock B: Average Price = =90 AED and variance== 33 AED



Coefficient of variation (A)= 7.2727%

Coefficient of variation (B)=6.3828%

Coefficient of variation (Stock A) > coefficient of variation (Stock B)

Stock A is more variable than Stock B.

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