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A share has a beta of 1.1 and a standard deviation of 16.67%. It also has an expected return of 13.30%. Calculate the coefficient of variation (CV).Select one:a.2.51b.9.70c.0.16d.1.25

Question

A share has a beta of 1.1 and a standard deviation of 16.67%. It also has an expected return of 13.30%. Calculate the coefficient of variation (CV).Select one:a.2.51b.9.70c.0.16d.1.25

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Solution

The coefficient of variation (CV) is a statistical measure of the relative dispersion of data points in a data series around the mean. It is calculated as the ratio of the standard deviation to the mean.

In this case, we are asked to calculate the CV for a share with a standard deviation of 16.67% and an expected return of 13.30%.

Here are the steps to calculate the CV:

Step 1: Convert the standard deviation and expected return percentages to decimal form.

Standard deviation = 16.67% = 0.1667 Expected return = 13.30% = 0.1330

Step 2: Divide the standard deviation by the expected return.

CV = Standard deviation / Expected return CV = 0.1667 / 0.1330

Step 3: Calculate the result.

CV = 1.25

So, the correct answer is d. 1.25.

This problem has been solved

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