Assume you are risk-averse and have the following three choices.

Assume you are risk-averse and have the following three choices.

     
 

	Expected Value			Standard Deviation
A	$	2,440		$	1,420
B		2,560			1,960
C		2,020			910

      

a.	Compute the coefficient of variation for each. (Round your answers to 3 decimal places.)

     

Projects	Coefficient of Variation
A
B
C

        

b.	Which project will you select?
	Project C

   

 
Explanation:

  
a.


 

A		$1,420 / $2,440	=	.582
B		1,960 / $2,560	=	.766
C		$910 / $2,020	=	.450

b. 

Based on the coefficient of variation, you should select Project C as it is the least risky.