Two alternative expected returns are compared with help of__________?
Correct answer: A. Coefficient of variation
- A. Coefficient of variation
- B. Coefficient of deviation
- C. Coefficient of standard
- D. Coefficient of return
Explanation
The coefficient of variation compares risk relative to expected return, making it useful when evaluating alternative investments with different expected returns. It is calculated as standard deviation divided by expected return.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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