Because of differences in the expected returns of different investments,the standard deviation is not always an adequate measure of risk.However,the coefficient of variation adjusts for differences in expected returns and thus allows investors to make better comparisons of investments' stand-alone risk.

Question

Quizplus · Accepted Answer

The statement correctly explains the limitations of using standard deviation as a measure of risk and how coefficient of variation can address those limitations.

Because of Differences in the Expected Returns of Different Investments,the