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

Example

The Standard deviation of the Net Present Value of a project = $100m.

The Expected Net Present Value = $50m.

Coefficient of variation is given by:

= $100m / $50m

= 2.0.

See also

• Expected value
• Net present value
• Standard deviation