The Coefficient of Variation of the Returns, Also Known as the Risk-To-Reward

question 23

Multiple Choice

The coefficient of variation of the returns, also known as the risk-to-reward ratio, is defined as:

• A) The standard deviation of returns divided by the mean return
• B) The variance of return multiplied by the mean return
• C) The variance of returns divided by the standard deviation of returns
• D) None of the above

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, representing the interest payable on any borrowings - bonds, loans, convertible debt, or lines of credit.

Consolidated Net Income

The total earnings of a parent company and its subsidiaries, after taxes and interest, reported as a single figure.

Noncontrolling Interest

Noncontrolling interest is the portion of equity interest in a subsidiary not held by the parent company, reflecting the equity ownership of minority shareholders.