Question: Metal Manufacturing has isolated four alternatives for meeting its need for increased production capacity. The information gathered relative to each of these alternatives are summarized in the following table:
|
Alternative
|
Expected Return
|
Standard deviation
|
|
A
|
12%
|
.29
|
|
B
|
12.5
|
.032
|
|
C
|
13
|
.035
|
|
D
|
12.8
|
.030
|
[A] Compute the coefficient of variation for every alternative.
[B] Which alternative do you select and Why?