- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 2. Organizing, Visualizing, and Describing Data
- Subject 9. Downside Deviation and Coefficient of Variation

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**CFA Practice Question**

For an investment portfolio, the coefficient of variation of the returns on the portfolio is best described as measuring ______.

B. mean return per unit of risk

C. mean excess return per unit of risk

A. risk per unit of mean return

B. mean return per unit of risk

C. mean excess return per unit of risk

Correct Answer: A

The coefficient of variation is defined as the standard deviation of the portfolio (a measure of risk) divided by the mean return on the portfolio (i.e., risk per unit of mean return).

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