Question: Analysis of annualized returns over a 10 year period showed that

Analysis of annualized returns over a 10-year period showed that prepaid tuition plans had a mean return of 6.3 percent with a standard deviation of 2.7 percent, while the Standard & Poor's 500 stock index had a mean return of 12.9 percent with a standard deviation of 15.8 percent.
(a) Calculate and compare the coefficients of variation.
(b) Why would we use a coefficient of variation? Why not just compare the standard deviations?

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  • CreatedAugust 19, 2015
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