Question
The coefficient of variation is a better measure of stand-alone risk than standard deviation because it is a standardized measure of risk per unit; it
The coefficient of variation is a better measure of stand-alone risk than standard deviation because it is a standardized measure of risk per unit; it is calculated as the-Select-
correlation coefficient
risk premium
standard deviation
Correct 5 of Item 1
divided by the expected return. The coefficient of variation shows the risk per unit of return, so it provides a more meaningful risk measure when the expected returns on two alternatives are not-Select-
identical
different
correlated
Correct 6 of Item 1
.
Quantitative Problem:You are given the following probability distribution for CHC Enterprises:
State of EconomyProbabilityRate of returnStrong0.1519%Normal0.559%Weak0.3-5%
What is the stock's expected return? Round your answer to 2 decimal places. Do not round intermediate calculations.
%
What is the stock's standard deviation? Round your answer to two decimal places. Do not round intermediate calculations.
%
What is the stock's coefficient of variation? Round your answer to two decimal places. Do not round intermediate calculations.
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