Question
The possible returns from investing in Academy share are as follows: State of economy Probability of state of economy Return if state occurs Strong 0.3
- The possible returns from investing in Academy share are as follows:
| State of economy | Probability of state of economy | Return if state occurs |
| Strong | 0.3 | 34% |
| Normal | 0.4 | 10% |
| Weak | 0.3 | -16% |
Based on the above information, calculate the standard deviation of returns and coefficient of variation for Academy share. What does the coefficient of variation reveal about an investments risk that the standard deviation does not?
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Public Finance And Public Policy
Authors: Arye L. Hillman
2nd Edition
0521738059, 978-0521738057
