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
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 | $180 | $62 |
| 3 | $240 | $104 |
| 6 | $300 | $166 |
| 9 | $400 | $292 |
a. Compute the coefficient of variation (v) for each time period.
b. Does the risk (v) appear to be increasing over a period of time? If so, why might this be the case?
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Cost Of Capital In Managerial Finance
Authors: Dennis Schlegel
2015th Edition
3319151347, 978-3319151342
