Which Statement Regarding Coefficient of Variation Is NOT True

question 98

Multiple Choice

Which statement regarding coefficient of variation is NOT true?

• A) is known as the trade-off between market risk and return.
• B) is a common relative measure of risk vs. reward.
• C) is the standard deviation divided by the average return.
• D) A smaller coefficient of variation indicates a better risk-reward relationship.

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Definitions:

Planning Purposes

The use of forecasts, targets, and models to guide strategic decision-making and to set goals for future organizational performance.

Production Costs

Expenses associated with the manufacture of products, including raw materials, labor, and overhead.

Period Cost

Expenses that are not tied to the production process and are therefore expensed in the period they are incurred, such as selling and administrative expenses.

Direct Material

Raw materials that can be directly traced to the manufacturing of a product and are significant in cost.