1. **State the problem:** We need to compare the relative risk of two stocks, X and Y, using the coefficient of variation (CV), and then recommend which stock is better for a risk-averse investor. 2. **Calculate the coefficient of variation (CV):** The CV is defined as the ratio of the standard deviation to the mean (average price), expressed as $$\text{CV} = \frac{\text{Standard Deviation}}{\text{Mean}}$$ 3. **Calculate CV for Stock X:** $$\text{CV}_X = \frac{4.20}{45} = 0.0933$$ 4. **Calculate CV for Stock Y:** $$\text{CV}_Y = \frac{8.50}{120} = 0.0708$$ 5. **Interpretation:** The coefficient of variation measures relative risk; a lower CV means less risk relative to the expected return. 6. **Comparison:** Since $$0.0708 < 0.0933$$, Stock Y has a lower relative risk than Stock X. 7. **Recommendation for a risk-averse investor:** A risk-averse investor prefers investments with lower relative risk. Therefore, Stock Y is recommended because it has a lower coefficient of variation, indicating less risk per unit of expected return. **Final answer:** - CV of Stock X = 0.0933 - CV of Stock Y = 0.0708 - Recommend Stock Y for a risk-averse investor due to its lower relative risk.