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

Sum of a number of terms in g.p., We know that the terms in G.P. are:...

We know that the terms in G.P. are: a, ar, ar 2 , ar 3 , ar 4 , ................, ar n-1 Let s be the sum of these terms, then s = a + ar + ar 2

Estimate how much should every friend pay, A group of ?ve friends gone out ...

A group of ?ve friends gone out to lunch. The total bill for the lunch was $53.75. Their meals all cost about the similar, so they needed to split the bill evenly. Without consider

Describe about parallel and perpendicular lines, Describe about Parallel an...

Describe about Parallel and Perpendicular Lines ? Parallel Lines : Parallel lines are coplanar lines (lines that lie in the same plane) that never intersect. The bl

Linear equation, The ratio between the length and breadth of a rectangular ...

The ratio between the length and breadth of a rectangular field is 11:7. The cost of fencing it is Rs. 75,000. Find the dimensions of the field

matlab, how to solve simplex method using matlab

how to solve simplex method using matlab?

How to multiply two fractions, Q. How to Multiply two Fractions? Multip...

Q. How to Multiply two Fractions? Multiplying fractions is really easy! The rule is: "multiply across"- You multiply the numerators, and you multiply the denominators.

Exact differential equations, The subsequent type of first order differenti...

The subsequent type of first order differential equations which we'll be searching is correct differential equations. Before we find in the full details behind solving precise diff

Video games, Should video game companies continue to alter their products t...

Should video game companies continue to alter their products to include other functions, such as e-mail

Unit rates, which shows the rate 12 inches of rain in 6 hours as a unit rat...

which shows the rate 12 inches of rain in 6 hours as a unit rate

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