When comparing different projects than standard deviation, Financial Management

Assignment Help:

Why is the coefficient of variation often a better risk measure when comparing different projects than the standard deviation?

Whenever we wish to compare the risk of investments that have different means, we make use of the coefficient of variation (CV).  The CV symbolizes the standard deviation's percentage of the mean.  For the reason that the CV is a ratio, it adjusts for variations in means, while the standard deviation doesn't.  Thus the CV supplies a standardized measure of the degree of risk that can be used to compare alternatives.

 


Related Discussions:- When comparing different projects than standard deviation

Evaluate earning yield plus growth in earning method, Q. Evaluate Earning Y...

Q. Evaluate Earning Yield plus Growth in Earning Method? Earning Yield plus Growth in Earning Method: - If the EPS of a company is likely to grow at a constant rate of growth t

Show the advantages of irr method, Q. Show the Advantages of IRR Method? ...

Q. Show the Advantages of IRR Method? Advantages of IRR Method:- (i) Similar to the other DCF methods IRR methods as well take into consideration the time value of money.

MM., What are the assumptions of MM(Modigliani Miller) approach?

What are the assumptions of MM(Modigliani Miller) approach?

Manage an assignment, Manage a project or clearly defined piece of work fro...

Manage a project or clearly defined piece of work from beginning to end. This may include setting up a budgetary system.

Annuties (ordinary vs due), The values shown in ordinary annuity tables (ei...

The values shown in ordinary annuity tables (either present value or compound value) can be adjusted to the annuity due form by ____ the ordinary annuity interest factor by ____. (

What number of seats generates that maximum revenue, Q. In planning a resta...

Q. In planning a restaurant, it is estimated that a revenue of $6 per seat will be realized if the number of seats is at most 50. On the other hand, the revenue on each seat will d

Functional classification of mutual funds, Functional Classification of Mut...

Functional Classification of Mutual Funds Functional classification of Mutual Funds is based on the basic characteristics of the mutual fund schemes for subscription. Mutual Fu

Credit enhancement, To obtain an investment credit rating and make th...

To obtain an investment credit rating and make the transaction attractive to the investors, some type of credit enhancement procedure is usually necessary. In ord

Bonds Valuation, Six years ago . the singleton company sold a 20 year bond ...

Six years ago . the singleton company sold a 20 year bond with a 14% annual coupon rate and a 9% call premium. today, singleton called the bonds. the bonds originally were sold at

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd