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

Derivatives with chain rule, Chain Rule : We've seen many derivatives...

Chain Rule : We've seen many derivatives.  However, they have all been functions similar to the following kinds of functions. R ( z ) = √z      f (t ) = t 50

Example of mixing problems, A 1500 gallon tank primarily holds 600 gallons ...

A 1500 gallon tank primarily holds 600 gallons of water along with 5 lbs of salt dissolved into it. Water enters the tank at a rate of 9 gal/hr and the water entering the tank has

Auxiliary methods for information distribution, AUXILIARY METHODS There...

AUXILIARY METHODS There are other reprographic methods which although commonly used earlier, are now mainly used for specific purposes. We think you should be aware of these me

Find out indegree, Question: Consider a digraph D on 5 nodes, named x0...

Question: Consider a digraph D on 5 nodes, named x0, x1,.., x4, such that its adjacency matrix contains 1's in all the elements above the diagonal A[0,0], A[1,1], A[2,2],.., e

Probability, An unbiased die is tossed twice .Find the probability of getti...

An unbiased die is tossed twice .Find the probability of getting a 4,5,6 on the first toss and a 1,2,3,4 on the second toss

Find out a series solution for differential equation, Find out a series sol...

Find out a series solution for the following differential equation about x 0 = 0 y′′ + y = 0.   Solution Note that in this case p(x)=1 and therefore every point is an or

Shoppers` stop, 3. How are Indian customers visiting Shoppers’ Stop any dif...

3. How are Indian customers visiting Shoppers’ Stop any different from customers of developed western countries? 4. How should Shoppers’ Stop develop its demand forecasts?

Differentiate exponential functions, Differentiate following functions. ...

Differentiate following functions. (a)    R ( w) = 4 w - 5 log 9 w (b)   f ( x ) = 3e x + 10x 3 ln x Solution :  (a) It will be the only example which doesn't includ

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