McLeod Inc. is considering an investment that has an expected return of 15% and a standard deviation of 10%. What is the investment's coefficient of variation?

Coefficient of variation = 0.67

Explanation:

Coefficient of variation:

The coefficient of variation (CV) is the ratio of the standard deviation to the mean.

Formula:

Coefficient of variation = Standard deviation / expected return

McLeod Inc. is considering an investment that has an expected return of 15% and a standard deviation of 10%.

Therefore by putting the values in the above formula, we get

Coefficient of variation = 10% / 15%

Coefficient of variation = 0.10 / 0.15

Coefficient of variation = 0.67