Coefficient of Variation: Assessment of Risk Increasing
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Digital Technology wishes to determine its coefficient of variation as a company over time. The firm projects the following data (in millions of dollars):
Year
Profits?
Expected Value
Standard
Deviation
1 . . . . . . . . . . . . . $180 $ 62
3 . . . . . . . . . . . . . 240 104
6 . . . . . . . . . . . . . 300 166
9 . . . . . . . . . . . . . 400 292
a. Compute the coefficient of variation (V) for each time period.
b. Does the risk (V) appear to be increasing over a period of time? If so, why might this be the case?
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Solution Summary
The solution examines digital technology. The coefficient of variation and assessment of risk increasing is determined.
Solution Preview
Given that,
Year Expected Profit Standard Deviation Coefficient of variation
1 $180 $62 ...
Education
- MBA, Indian Institute of Finance
- Bsc, Madras University
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