Question

The mean return on equity (ROE) for a group of firms in an industry is 15% with a variance of 9%. The coefficient of variation of the industry's ROE is _____.

Answer 1

Answer:

0.2

Explanation:

Data provided as per the given question

Mean = 15%

Variance = 9%  

Standard deviation = 3%

The computation of return on equity is shown below:-

Coefficient variance = (Standard deviation ÷ Mean)

= 0.03 ÷ 0.15

= 0.2

Therefore for computing the coefficient variance we simply divide standard deviation from the mean.