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Assume you are risk-averse and have the following three choices. Expected Value Standard Deviation A $ 2,470 $ 900 B 2,890 1,400 C 1,710 770 a. Compute the coefficient of variation for each. (Round your answers to 3 decimal places.)

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emaduet2012

Answer:

Description Coefficient of variation  

A                    36.437  %

B                    48.443  %

C                    45.029  %

Explanation:

Formula is

Coefficient  of  variation  =  standard  deviation / expected  value

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AmmarAwais

Answer:

The coefficient of variation for choice A is 0.364. For choice B, it is 0.484. For choice C, it is 0.450.

Explanation:

Coefficient of variation (CV) measures the dispersion of of data points around the mean. It is calculated as the ratio of the standard deviation to the expected value.

Coefficient of variation = Standard Deviation / Expected Value

We can, therefore, apply the above formula to the three choices given in the question: A, B and C. The calculations are as follows.

Coefficient of variation for choice A = 900 / 2470 = 0.364

Coefficient of variation for choice B = 1400 / 2890 = 0.484

Coefficient of variation for choice C = 770 / 1710 = 0.450

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