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

What is number systems, NUMBER SYSTEMS: Numbers  are intellectual  witne...

NUMBER SYSTEMS: Numbers  are intellectual  witnesses  that belong  only  to  mankind. Example: If the H C F of 657 and 963 is expressible in the form of 657x + 963 x -

Solve and graph equation of parabola, SOLVE AND GRAPH THE PARABOLA NOTE: W...

SOLVE AND GRAPH THE PARABOLA NOTE: WRITE YOUR SOLUTIONS AND COMPLETE EQUATION OF GRAPH SPOINTS EACH 1. V(0,0) (0.2) P-2 2. V(0,0) E-5,0) P=-5 3. V(4-3) F(4,-2) P=1 4. V-1,5)

How many ways can dvds be arranged on a shelf, How many ways can 4 DVDs be ...

How many ways can 4 DVDs be arranged on a shelf? Solution: There are 4 ways to choose the first DVD, 3 ways to choose the second, 2 ways to choose the third and 1 way to choo

Invoices and trade discounts, Natureland garden center buys lawn mowers tha...

Natureland garden center buys lawn mowers that list for $679.95 less a 30% discount. What is the dollar amount of the discount?

Fraction, maria has a slice of pizza that is 1/6 of the pizaa.Ben has a sli...

maria has a slice of pizza that is 1/6 of the pizaa.Ben has a slice of pizza that is 1/3 of the pizza, marias slice is bigger.draw pizzas to show how this is possible.

Nonhomogeneous systems, We now require addressing nonhomogeneous systems in...

We now require addressing nonhomogeneous systems in brief. Both of the methods which we looked at back in the second order differential equations section can also be used now.  Sin

Graph y = cos ( x ) - common graph, Graph y = cos (x) Solution: There ...

Graph y = cos (x) Solution: There actually isn't a whole lot to this one.  Given the graph for -4 ? ≤ x ≤ 4 ? . Note that we can put all values of x in cosine (that wo

Real numbers, how to present root numbers on a number line

how to present root numbers on a number line

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