# Coefficient of variation

Metal Manufacturing has isolated four alternatives for meeting its need for increase production capacity. The following table summarizes data gathered relative to each of these alternatives.

Alternative Expected return Standard deviation

of return

A 20% 7.0%

B 22% 9.5

C 19 6.0

D 16 5.5

a. Calculate the coefficient of variation for each alternative.

b. If the firm wishes to minimize risk, which alternative do you recommend? Why?

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Metal Manufacturing has isolated four alternatives for meeting its need for increase production capacity. The following table summarizes data gathered relative to each of these alternatives.

Alternative Expected return Standard deviation

...

#### Solution Summary

The solution calculates coefficient of variationfor 4 alternatives and finds the alternative that minimizes risk.