Horti-Business Management (2+0)

4. Measurement / Quantification of Risk

Coefficient of Variation (C.V.) is a simple and most widely used measure or risk.

C.V = (σ/ X) x 100

Where,

σ= Standard deviation and X = Mean



∑(X-X)²

Standard Deviation S.D. σ= --------------

N

Where,

X = variable for which σ is estimating
X = mean, N = number of observations
Higher the C.V. higher will be the risk.