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The spread in the annual prices of stocks selling for under $10

I have the following problem to figure out and I am completely lost:

The spread in the annual prices of stocks selling for under $10 and the spread in prices of those selling for over $60 are to be compared. The mean price of the stocks selling for under $10 is $5.25 and the standard deviation $1.52. The mean price of those stocks selling for over $60 is $95.20 and the standard deviation $5.28.

a. Why should the coefficient of the variation be used to compare the dispersion in the prices?
b. Compute the coefficients of the variation. What is your conclusion?

If someone could help me with this, I would really appreciate it.

Solution Preview

a. Coefficient of variation is an indication of the volatility (risk) that is involved in the stock in comparison to the amount ...

Solution Summary

The spread in the annual prices of stocks selling for under $10 and the spread in prices of those selling for over $60 are to be compared. The mean price of the stocks selling for under $10 is $5.25 and the standard deviation $1.52. The mean price of those stocks selling for over $60 is $95.20 and the standard deviation $5.28.

$2.19