Asked by leslie harris on Apr 27, 2024
Verified
The coefficient of variation,calculated as the standard deviation of expected returns divided by the expected return,is a standardized measure of the risk per unit of expected return.
Coefficient of Variation
A statistical measure of the dispersion of data points in a data series around the mean, indicating the relative risk of an investment.
Standard Deviation
A statistical measure that quantifies the amount of variation or dispersion of a set of values.
Expected Returns
The anticipated return on an investment, usually based on historical data and analysis of potential future events.
- Know the measures of risk including variance, standard deviation, and the coefficient of variation.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
True
Explanation :
The statement is true. The coefficient of variation provides a standardized measure of risk relative to the level of expected return. It is calculated by dividing the standard deviation of expected returns by the expected return.
Learning Objectives
- Know the measures of risk including variance, standard deviation, and the coefficient of variation.