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

Trigonometry, A 25 foot ladder just reaches the top of a house and forms an...

A 25 foot ladder just reaches the top of a house and forms an angle of 41.5 degrees with the wall of the house. How tall is the house?

1trig, how do you find the tan, sin, and cos.

how do you find the tan, sin, and cos.

Ms. Smith, How can I use the I=Prt formula to get the interest for this pro...

How can I use the I=Prt formula to get the interest for this problem? A car dealer sells me a car for $16450 with $3,290 down and $339.97 monthly payments for 48 months. What is

Matrix, cramers rule introduction

cramers rule introduction

Fractions, how to add a fraction with an uncommon denomoninator

how to add a fraction with an uncommon denomoninator

Draw a common graph y = sin ( x ), Graph y = sin ( x ) Solution : As a...

Graph y = sin ( x ) Solution : As along the first problem in this section there actually isn't a lot to do other than graph it.  Following is the graph. From this grap

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