Coefficient of variationMetal Manufacturing has isolated four alternatives for meeting its need for increased production...
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Coefficient of variationMetal Manufacturing has isolated four alternatives for meeting its need for increased production capacity. The following table summarizes data gathered relative to each of these alternatives:
| Alternative | Expected return | Standard deviation |
| A | 20% | 8.4% |
| B | 25% | 9.1% |
| C | 19% | 6.3% |
| D | 16% | 4.1% |
a.Calculate the coefficient of variation for each alternative.
b.If the firm wishes to minimize risk, which alternative do you recommend? Why?
a.The coefficient of variation for alternative A? (Round to three decimal places.)
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