- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 3. Statistical Measures of Asset Returns
- Subject 2. Measures of Dispersion
CFA Practice Question
What does the coefficient of variation (CV) generally lie between?
A. -1 and +1
B. 0% and infinity
C. It has unlimited values.
Explanation: Since mean can be negative or positive, the CV can be any value.
User Contributed Comments 4
| User | Comment |
|---|---|
| yanpz | By definition, CV is a statistical representation of the precision of a test; the function is standard deviation/mean x 100%. So it doesn't have to be "expected return". If it's not "expected return", then mean is possible to be negative. |
| wollogo | I agree fully, it is quite common to have negative returns meaning that CV will be negative. |
| padasalasunil | i thought CV = std dev / (absolute(mean)) |
| Procbaby1 | (std dev of a distribution)/(mean or expected value) |