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

Solid mensuration, what is the importance of solid mensuration?

what is the importance of solid mensuration?

Cenamatic, a tire placed on a balancing machine in a service station starts...

a tire placed on a balancing machine in a service station starts from rest an d turns through 4.7 revolutions in 1.2 seconds before reaching its final angular speed Calculate its a

Vb code, some basic vb codes withing excel to get things done quickly.

some basic vb codes withing excel to get things done quickly.

Determine the volume of the box, Safe deposit boxes are rented at the bank....

Safe deposit boxes are rented at the bank. The dimensions of a box are (22x5x5) in. Determine the volume of the box? a. 220 in 3 b. 550 in 3 c. 490 in 3 d. 360 in 3

Ratios, 450 students. if there are 50 more boys than girls, how many boys a...

450 students. if there are 50 more boys than girls, how many boys and girls are there?

Write down the system of differential equations, Write down the system of d...

Write down the system of differential equations for mass system and the spring above. Solution To assist us out let's first take a rapid look at a situation wherein both of

Calculate the area of remaining piece of cardboard, A piece of cardboard in...

A piece of cardboard in the shape of a trapezium ABCD & AB || DE, ∠ BCD = 900, quarter circle BFEC is removed. Given AB = BC = 3.5 cm, DE = 2 cm. Calculate the area of remaining p

Solve the fractional equation, Solve the fractional equation: Example...

Solve the fractional equation: Example: Solve the fractional equation 1/(x-2) +1/(x+3) =0 Solution: The LCD is (x - 2)(x + 3); therefore, multiply both sides of t

Inequalities and intervals, What inequalities and intervals are? If it is g...

What inequalities and intervals are? If it is given that a real number 'p' is not less than another real number 'q', we understand that either p should be equal to q or

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