The mean monthly return on (U.S. Treasury bills) T-bills is 0.42% with a standard deviation of 0.25%. What is the coefficient of variation?
A)
84%.
B)
168%.
C)
60%.
The coefficient of variation expresses how much dispersion exists relative to the mean of a distribution and is found by CV = s / mean, or 0.25 / 0.42 = 0.595, or 60%.
An investor is considering two investments. Stock A has a mean annual return of 16% and a standard deviation of 14%. Stock B has a mean annual return of 20% and a standard deviation of 30%. Calculate the coefficient of variation (CV) of each stock and determine if Stock A has less dispersion or more dispersion relative to B. Stock A's CV is:
A)
0.875, and thus has less dispersion relative to the mean than Stock B.
B)
1.14, and thus has more dispersion relative to the mean than Stock B.
C)
1.14, and thus has less dispersion relative to the mean than Stock B.
An investor is considering two investments. Stock A has a mean annual return of 16% and a standard deviation of 14%. Stock B has a mean annual return of 20% and a standard deviation of 30%. Calculate the coefficient of variation (CV) of each stock and determine if Stock A has less dispersion or more dispersion relative to B. Stock A's CV is:
A)
0.875, and thus has less dispersion relative to the mean than Stock B.
B)
1.14, and thus has more dispersion relative to the mean than Stock B.
C)
1.14, and thus has less dispersion relative to the mean than Stock B.
CV stock A = 0.14 / 0.16 = 0.875
CV stock B = 0.03 / 0.20 = 1.5
Stock A has less dispersion relative to the mean than Stock B.
发表于 2010-4-9 15:04
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