The mean return on equity (ROE) for a group of firms in an industry is 15% with a variance of 9%. The coefficient of variation of the industry's ROE is ________.
A) 0.2
B) 0.6
C) 1.7
D) 5.0

Question

Quizplus · Accepted Answer

The coefficient of variation is calculated by dividing the standard deviation by the mean. In this case, the standard deviation is the square root of the variance, which is 3%. Therefore, the coefficient of variation is 3% / 15% = 0.2.

The Mean Return on Equity (ROE) for a Group of Firms