Coefficient of variation: Difference between revisions
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imported>Doug Williamson m (Added more space so that calculations are clearer) |
imported>Doug Williamson (Align presentation of formula with qualification material) |
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For example; | '''For example;''' | ||
if the Standard deviation of the Net Present Value of a project = $100m, | if the Standard deviation of the Net Present Value of a project = $100m, | ||
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Coefficient of variation | Coefficient of variation | ||
= $100m/$50m | = $100m / $50m | ||
= 2.0. | = 2.0. | ||
Revision as of 15:23, 14 March 2015
A measure of the variability of a distribution, expressed as a proportion of the expected value.
It is calculated as: [Standard Deviation]/[Expected value].
For example;
if the Standard deviation of the Net Present Value of a project = $100m,
and the Expected Net Present Value = $50m, then:
Coefficient of variation
= $100m / $50m
= 2.0.
