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

Express the negation of the statement, States the negation of the statement...

States the negation of the statement ∀x ∃y (xy = 1) so that no negation precedes a quantifier. Ans: The negation of the following statement is written as ~ [∀x ∃y (xy = 1)]. An

Prove that the poset has a unique least element, Prove that the Poset has a...

Prove that the Poset has a unique least element Prove that if (A, ) has a least element, then (A,≤)  has a unique least element. Ans: Let (A, ≤) be a poset. Suppose the po

Calculate the volume and surface area of a cube, Calculate the volume and s...

Calculate the volume and surface area of a cube: Calculate the volume and surface area of a cube with a = 3".  Be sure to involved units in your answer. Solution: V =

Commercial, The C.P. of 20 articles is same as theS.P. of x articles.Articl...

The C.P. of 20 articles is same as theS.P. of x articles.Article profit is 25%.Find x

Factor expressions involving large powers, Factor Expressions Involving Lar...

Factor Expressions Involving Large Powers, Radicals, and Trig Functions You can use substitution to factor expressions involving large powers, radicals, and trig functions

Total accumulation of the amount deposited in saving account, A bank pays o...

A bank pays on its savings an interest rate of 6% per year but compounds interest monthly (i.e., estimates the interest each month and adds it to the balance).  You plan to deposit

Determine the domain and range of function, Determine the domain of each of...

Determine the domain of each of the following functions.                         f( x ) = x - 4 / x 2 - 2 x -15 Solution With this problem we have to avoid division by

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