Standard Deviation Is a Better Measure of Risk Than the Coefficient

question 40

True/False

standard deviation is a better measure of risk than the coefficient of variation if the expected returns of the securities being compared differ significantly.

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Definitions:

Accounts Payable

The amount a company owes to suppliers or vendors for goods or services purchased on credit.

Accounts Receivable

Money owed to a business by its clients for goods or services that have been delivered but not yet paid for.

Incremental Cash Flows

Incremental cash flows are the additional operating cash flows that an organization receives from taking on a new project, used to analyze the profitability of that project.

Capital Investment

Funds invested in a firm or enterprise for the purpose of furthering its business objectives.