The College Copy Shop is in process of purchasing a high-tech copier. In its search, it has gathered the following information about two possible copiers A and B

(a) Compute expected rate of return for each copier.
(b) Compute variance and standard deviation of rate of return for each copier.
(c) Which copier should they purchase?

a and b.

Expected value = 16.9% Expected value = 17.05%
Variance A = 17.48 Variance = 35.65
SD = 4.18% SD = 5.97%
(c) CV = SD / r
Copier A: CV = 4.18/16.90 = 0.25
Copier B: CV = 5.97/17.05 = 0.35
The College Copy Shop should buy copier A.