Based upon A 1) Avg = (5 + 10 + 15+4)/4 = 8.5 2) Variance = ( (5-8.5)^2 + (10-8.

Question

Based upon A 1) Avg = (5 + 10 + 15+4)/4 = 8.5 2) Variance = ( (5-8.5)^2 + (10-8.5)^2 + (15-8.5)^2 + (4-8.5)^2) *(1/4) = 19.25 3) Std deviation = sqrt(19.25) = 4.387 4) Coefficient = 19.25*4/(5^2 + 10^2 + 15^2 + 4^2) = 0.21 B 1) Avg = (-6+20+2-5+10)/5 = 4.2 2) Variance = ( (-6-4.2)^2 + (20-4.2)^2 + (2-4.2)^2 + (-5-4.2)^2 + (10-4.2)^2) * (1/5) = 95.36 3) Std deviation = sqrt(95.36) = 9.76 4) Coefficient =95.36*5/((-6)^2 + 20^2 + 2^2 + (-5)^2 + 10^2) = 0.844 C 1) Avg = (12 +15+17)/3 = 14.67 2) Variance = ((12-14.67)^2 + (15-14.67)^2 + (17-14.67)^2) * (1/3) = 7.796 3) Std deviation = sqrt(7.796) = 2.792 4) Coefficient =7.796*3/(12^2 + 15^2 + 17^2) = 0.0355 D 1) average = 10-10+20-15+8-7 /6 = 1% 2)variance = (10-1)2 +(-10-1)2+(20-1)2+(-15-1)2+(8-1)2+(-7-1)2 / 6 variance = 112.667 standard deviation = sqrt(variance) = sqrt(112.667) =10.614 which asset appears riskiest Based on coefficient of variation?

Explanation / Answer

The bigger the variance, the wider the distribution, the greater the random error, and the poorer the precision of the method; more the risk

the smaller the variance, the narrower and sharper the distribution, the smaller the random error, and the better the precision of the method. less the risk

Answer is D

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