(Solved): Analysis of investment portfolio returns over a 20 -year period showed the statistics below. a Cli ...

Analysis of investment portfolio returns over a 20 -year period showed the statistics below. a Click here for the Excel Data Flle (a) Calculate and compare the coefficients of variation. (Round your answers to 2 decimal places.) (b) Why would we use a coefficient of variation, and why not just compare the standard deviations? The standard deviations are relative and not absolute measures of dispersion. Standard deviation can only be compared when the varlables have different units of measure. The standard deviations are an "absolute", not relative, measure of dispersion. It is best to use the CV when comparing across variables that have different means. (c) What do the data tell you about risk and return at that time perlod? Venture funds have lower risk and greater return than common stocks based on the CV. Federal short-term paper has the lowest standard devlation and hence the greatest risk; real estate, the lowest risk. Venture funds have greater risk and lower return than common stocks based on the CV. Federal short-term paper has the lowest \( \mathrm{CV} \) and hence the greatest risk; real estate, the lowest risk.