Standard deviation versus coefficient of variation as measures of risk ? Greengage, Inc., a successful? nursery, is considering several expansion projects. All of the alternatives promise to produce an acceptable return. Data on four possible projects appear in the following? table:
a. Which project is least? risky, judging on the basis of range??
b. Which project has the lowest standard deviation??
Explain why standard deviation may not be an entirely appropriate measure of risk for purposes of this comparison.
c. Calculate the coefficient of variation for each project. Which project do you think? Greengage's owners should? choose?
The coefficient of variation for project A is _________ round to three decimal places
|
A
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13.4%
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4.3%
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3.9%
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B
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13.5%
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4.7%
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3.6%
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C
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13.1%
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6.1%
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2.9%
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D
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11.6%
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4.5%
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3.3%
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