The higher the coefficient of variation, the greater the risk and therefore the higher the expected return.

Name: The higher the coefficient of variation, the greater the risk and therefore the higher the expected return.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The coefficient of variation is a measure of the risk of an investment relative to its expected return. Generally, the higher the coefficient of variation, the higher the risk and the higher the expected return to compensate for that risk. Therefore, statement A is true.

The Higher the Coefficient of Variation, the Greater the Risk