Coefficient of variation

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.

See also

• Expected value
• Net present value
• Standard deviation