Calculate the coefficient of variation based on the followin

Calculate the coefficient of variation

based

on the following information.

Standard Deviation                                  

Expected return    

Company A

14

21.875

Company B

10.9

24

Solution

The coefficient of variance for company A is:

Standard deviation/expected return=14/21.875

=0.64

The coefficient for variance for company B is:

Standard deviation/expected return=10.9/24

=0.45