PRC-2 · Chapter 8 · Question 51 of 60
An asset generates an average return of 20% with a standard deviation of 5%. What is the precisely calculated Coefficient of Variation (CV)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 25%
Explanation
The Coefficient of Variation measures relative dispersion as a percentage. It is calculated as (Standard Deviation / Mean) * 100. Here, (5 / 20) * 100 = 0.25 * 100 = 25%.
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