RISK AND RETURN

Risk, Return, and Capital Asset Pricing Model

Risk, Return, and Capital Asset Pricing Model

Mean, Standard Deviation and Coefficient of Variation of the Returns

Statistics

Company A Return

Company B Return

Average Market Return

N

Valid

16

16

16

Mean

.0456

.0406

.0744

Std. Deviation

.04115

.04725

.02220

Coefficient of variation

0.902412281

1.163793103

0.298387097

From the above table, it can be observed that return of Company B is more volatile with respect to its risk as the coefficient of variation is 1.1637 which is higher than the company B. Moreover, the return of Company A is less risky as compared to company B as the coefficient of variation of Company A is 0.090. Therefore, being a risk averse investor, I would choose to ...