Exhibit 1-5
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
Assume that during the past year the consumer price index increased by 1.5% percent and the securities listed below returned the following nominal rates of return.
$\begin{array}{l}
\text {Canadian T-bils } &2.75 \% \
\text {Canadian corporate bonds } &4.75 \%
\end{array}$
-Refer to Exhibit 1-5. If over the past 20 years the annual returns on the S&P 500 market index averaged 12% with a standard deviation of 18%, what was the coefficient of variation?
A) 0.6
B) 0.6%
C) 1.5
D) 1.5%
E) 0.66%

Question

Exhibit 1-5
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
Assume that during the past year the consumer price index increased by 1.5% percent and the securities listed below returned the following nominal rates of return.
 $\begin{array}{l}
\text {Canadian T-bils  } &2.75 \% \
\text {Canadian corporate bonds  } &4.75 \%
\end{array}$
-Refer to Exhibit 1-5. If over the past 20 years the annual returns on the S&P 500 market index averaged 12% with a standard deviation of 18%, what was the coefficient of variation?
A) 0.6
B) 0.6%
C) 1.5
D) 1.5%
E) 0.66%

Quizplus · Accepted Answer

The coefficient of variation (CV) is calculated as the standard deviation divided by the mean (average) return, expressed as a percentage. For the S&P 500 market index, with an average return of 12% and a standard deviation of 18%, the CV = (18 / 12) = 1.5.

Exhibit 1-5 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Canadian T-bils 2.75%Canadian corporate bonds 4.75%\begin{array}{l}\text {Canadian T-bils } &2.75 \% \\\text {Canadian corporate bonds } &4.75 \%\end{array}Canadian T-bils Canadian corporate bonds ​2.75%4.75%​

Exhibit 1-5
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{l}\text {Canadian T-bils } &2.75 \% \\\text {Canadian corporate bonds } &4.75 \%\end{array}$