Financial analysts like to use the standard deviation as a measure of risk for a stock. The greater the deviation in a stock price over time, the more risky it is to invest in the stock. However, the average prices of some stocks are considerably higher than the average price of others, allowing for the potential of a greater standard deviation of price. For example, a standard deviation of $5.00 on a $10.00 stock is considerably different from a $5.00 standard deviation on a $40.00 stock. In this situation, a coefficient of variation might provide insight into risk. Suppose stock X costs an average of $36.00per share and showed a standard deviation of $3.60for the past 60 days. Suppose stock Y costs an average of $86.00per share and showed a standard deviation of $5.60for the past 60 days. Use the coefficient of variation to determine the variability for each stock.

(Round your answers to 2 decimal places, e.g. 2.63.)

Coefficient of variation for stock X =

enter percentages rounded to 2 decimal places

%

Coefficient of variation for stock Y =

enter percentages rounded to 2 decimal places

%

Stock

select an option

X

Y

has a greater relative variability.