Asset M has annual returns of 10%, -10%, 20%, -15%, 8%, and -7% for the past...

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Question

Asset M has annual returns of 10%, -10%, 20%, -15%, 8%, and -7% for the past six years. What is the coefficient of variation

Answer 1

Answer #1

Average return=Total return/Total time period

=(10-10+20-15+8-7)/6=1%

Standard deviation=[Total (Return-Average Return)^2/(Time period-1)]^(1/2)

=[932/(6-1)]^(1/2)

=[932/5]^(1/2)

=13.65%(Approx)

Coefficient of variation=Standard deviation/Expected return

=13.65/1

=13.65(Approx)

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Answer 2

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