An investor can use coefficient of variation (CV) to help de…
An investor can use coefficient of variation (CV) to help determine whether the investment’s expected return is worth the volatility (variability) it is likely to experience over time. Suppose a stock for Apple Inc has a standard deviation of 15% and an expected return of 19%, while broad market index fund PIMCO has a standard deviation of 8% and an expected return of 19%. Which financial commodity has lower relative volatility or variability? Â
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