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

Parameters of the poisson mixture model, Using R function nlm and your code...

Using R function nlm and your code from Exercise E1.2, write an R function called pois.mix.mle to obtain MLEs of the parameters of the Poisson mixture model.

What is the new cost of the pants, A pair of pants costs $24. The cost was ...

A pair of pants costs $24. The cost was decreased by 8%. What is the new cost of the pants? If the cost of the pants is decreased by 8%, the cost of the pants is 92 percent of

Factorization example, Example  Factorize x 2 - 4x + 4. If ...

Example  Factorize x 2 - 4x + 4. If we substitute x = 1, the value of the expression will be (1) 2 - 4(1) + 4 = 1 If we substitute x = -1, the value o

Applications of integrals, Applications of Integrals In this part we're...

Applications of Integrals In this part we're going to come across at some of the applications of integration.  It should be noted also that these kinds of applications are illu

Differential equatoin, how to solve questions based on higher differential ...

how to solve questions based on higher differential equations

Unit circle, Unit circle A circle centered at the origin with radius 1 ...

Unit circle A circle centered at the origin with radius 1 (i.e. this circle) is called as unit circle.  The unit circle is very useful in Trigonometry. (b) x 2 + ( y - 3) 2

Strategy -game theory, STRATEGY It refers to a total pattern of cho...

STRATEGY It refers to a total pattern of choices employed by any player. Strategy could be pure or a mixed one In a pure strategy, player X will play one row all of the

Find the volume of a cylinder of radius r, Find the volume of a cylinder of...

Find the volume of a cylinder of radius r and height h. Solution : Here, as we mentioned before starting this illustration we actually don't require using an integral to get t

Which of the following could not be the translation, If the expression 9y -...

If the expression 9y - 5 represents a certain number, which of the following could NOT be the translation? a. five less than nine times y b. five less than the sum of 9 and y c

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