Financial Technology Center - School of Business - Central Connecticut State University

Below are the stock returns for the past five years for Agnew Industries:

 Year                 Stock Return

2002                       22%

2001                       33 

2000                       1 

1999                      -12 

1998                       10 

      What was the stock’s coefficient of variation during this 5-year period? (Use the population standard deviation to calculate the coefficient of variation.)

Financial calculator solution:

Using your financial calculator you find the mean to be 10.8% and the population standard deviation to be 15.715%.  The coefficient of variation is just the standard deviation divided by the mean, or 15.715%/10.8% = 1.4551 » 1.46.