Because of differences in the expected returns on 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.

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This statement is true. The coefficient of variation (CV) takes into account the standard deviation of an investment's returns relative to its expected return, allowing for better comparisons of risk across investments with different expected returns. This adjustment makes the CV a more appropriate measure of stand-alone risk than the standard deviation alone.

Because of Differences in the Expected Returns on Different Investments