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29 January, 17:00

Cheng Inc. is considering a capital budgeting project that has an expected return of 24% and a standard deviation of 30%. What is the project's coefficient of variation? Do not round your intermediate calculations. Round the final answer to 2 decimal places.

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  1. 29 January, 17:04
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    The correct answer is 1,25.

    Explanation:

    The Coefficient of variation (CV) is a measure of the relative dispersion of a set of data, which is obtained by dividing the standard deviation of the set by its arithmetic mean and is usually expressed in percentage terms.

    In this case the standard deviation is divided over the expected return, and we have to:

    30/24 = 1.25
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Home » Business » Cheng Inc. is considering a capital budgeting project that has an expected return of 24% and a standard deviation of 30%. What is the project's coefficient of variation? Do not round your intermediate calculations.
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