A security has annual returns of 5%, 10%, and 15%. The Coefficient of variation of the security (using the population std. deviation) is closes to: A) 0.3 B) 0.4 C) 0.5 D) 0.6
blank
Std dev = 4.08 Mean = 10 answer 4.08 / 10 - 0.408 choice b
4.08/10 = 0.408 Answer is B?? - Dinesh S
stdev = sqrt(1/3*(5%-10%)^2 + 1/3*(10%-10%)^2 + 1/3*(15%-10%)^2)=5%*sqrt(2/3) = 4.08% CofV = .4
ehhh stupid error … i forgot to divide by 3, no wonder i kept getting D. Thanks guy!
but the questions is asking ‘’ using the population std. deviation’’ ? so it should be C, isn’t it?
population std deviation was .408…
right answer was B