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

Find the co ordinates of p such that ap =3/7 ab and p lies, If A & B are (-...

If A & B are (-2,-2) and (2,-4) respectively, find the co ordinates of P such that AP =3/7 AB and P lies on the line segment AB.

Geometry of arcs, how to divide an arc in three equal parts

how to divide an arc in three equal parts

Domain of a vector function - three dimensional space, Domain of a Vector F...

Domain of a Vector Function There is a Vector function of a single variable in R 2 and R 3 have the form, r → (t) = {f (t), g(t)} r → (t) = {f (t) , g(t), h(t)} co

Class 10, The value of K for (k+1)x^2-2(k-1)x+1 = 0 has real and equal root...

The value of K for (k+1)x^2-2(k-1)x+1 = 0 has real and equal roots.

Example of function, Example  Suppose the demand and cost functio...

Example  Suppose the demand and cost functions are given by          Q = 21 - 0.1P and C = 200 + 10Q Where,          Q - Quantity sold

Slope-intercept form, Slope-intercept form The ultimate special form of...

Slope-intercept form The ultimate special form of the equation of the line is possibly the one that most people are familiar with.  It is the slope-intercept form.  In this if

Sequence and series, Find the sum og series 1+(1+3)+(1+3+5)+.......+(1+3+.....

Find the sum og series 1+(1+3)+(1+3+5)+.......+(1+3+...+15+17)=

Calculus, sin(xy)+x=5y Find the derivative.

sin(xy)+x=5y Find the derivative.

Saxon math, what is the are of a square that is 2 inches long and 2 inches...

what is the are of a square that is 2 inches long and 2 inches wide?

Introduction to computers, What is a Computer? A computer is ...

What is a Computer? A computer is an electronic device which senses or accepts input data, performs operations or computations on the data in a pre-arranged sequence

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