Variance, Mathematics

Assignment Help:

Variance

Consider the example of investment opportunities. The expected gains were Rs.114 and Rs.81 respectively. The fact is that an investor also looks at the dispersion before coming to a decision.

501_variance.png

The dispersion of opportunity 1 is far greater than that of opportunity 2. This might alarm the investor.

In this example, it might be worthwhile to compute the coefficient of variation.

For opportunity 1, this works out to be

= (42/114) x 100 = 36.84%

For opportunity 2, this works out to be

= (29.14/81) x 100  = 35.97%

The investor may regard both opportunities homogeneous in this regard and therefore find opportunity 1 more attractive (because of the higher expected returns).

 


Related Discussions:- Variance

Evaluate the slope of the tangent line, Evaluate the given limits, showing ...

Evaluate the given limits, showing all working: Using first principles (i.e. the method used in Example 1, Washington 2009, Using definition to find derivative ) find the

Laplace transforms, In this section we will be searching how to utilize Lap...

In this section we will be searching how to utilize Laplace transforms to solve differential equations. There are various types of transforms out there into the world. Laplace tran

Polynomials, give an example of a binomial of degree 27?

give an example of a binomial of degree 27?

Matlab, Help my matlab questions

Help my matlab questions

Duality., advanteges of duality

advanteges of duality

Determine the size of the proposed repayments, Five years ago a business bo...

Five years ago a business borrowed $100,000 agreeing to repay the principal and all accumulated interest at 8% pa compounded quarterly, 8 years from the loan date. Two years after

Comparing, compare 643,251 633,512 and 633.893 the answer is 633.512 what i...

compare 643,251 633,512 and 633.893 the answer is 633.512 what is the question

Find the return period in years of the critical event, 1. A drainage system...

1. A drainage system overflows into a river causing pollution when the rainfall falling in an hour exceeds 50 mm. During any given year, the maximum hourly rainfall follows an expo

Help, how do i know what operation to use in a fraction word problem

how do i know what operation to use in a fraction word problem

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd