Two investments have the following expected returns (net present values)and standard deviations:
Based on the $\underline{\text{ Coefficient of Variation, }}$ where the C.V.is the standard deviation dividend by the expected value.

Question

Two investments have the following expected returns (net present values)and standard deviations:  
Based on the $\underline{\text{ Coefficient of Variation, }}$ where the C.V.is the standard deviation dividend by the expected value.

Quizplus · Accepted Answer

The Coefficient of Variation is found by dividing the standard deviation by the expected value. For Project Q, CV = 20,000/100,000 = 0.2 or 20%. For Project X, CV = 16,000/50,000 = 0.32 or 32%. Since Project X has a higher coefficient of variation, it is considered riskier than Project Q. Therefore, Choice C is the correct answer. Choices A, B, D, and E are incorrect.

Two Investments Have the Following Expected Returns (Net Present Values)and Coefficient of Variation, ‾\underline{\text{ Coefficient of Variation, }} Coefficient of Variation, ​

Two Investments Have the Following Expected Returns (Net Present Values)and $\underline{\text{ Coefficient of Variation, }}$