CFA Practice Question

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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 ______.

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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