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

Interpretations of derivatives, Interpretations of derivatives. Exampl...

Interpretations of derivatives. Example:   Find out the equation of the tangent line to                                       x 2 + y 2   =9 at the point (2, √5 ) .

How far up the building will the ladder reach?, A rescue and ?re squad plac...

A rescue and ?re squad places a 15 ft ladder against a burning building. If the ladder is 9 ft from the base of the building, how far up the building will the ladder reach? a. 8

Auxiliary methods for information distribution, AUXILIARY METHODS There...

AUXILIARY METHODS There are other reprographic methods which although commonly used earlier, are now mainly used for specific purposes. We think you should be aware of these me

., There are k baskets and n balls. The balls are put into the baskets rand...

There are k baskets and n balls. The balls are put into the baskets randomly. If k

Calculate combinations and permutations, a. Cassie has seven skirts, five b...

a. Cassie has seven skirts, five blouses, and ten pairs of shoes. How many possible outfits can she wear? b. Cassie decides that four of her skirts should not be worn to school.

Square of a number added to 25 equals 10 times the number, The square of a ...

The square of a number added to 25 equals 10 times the number. What is the number? Let x = the number.  The statement, "The square of a number added to 25 equals 10 times the n

Unitary method, who ,why and when discovered unitary method

who ,why and when discovered unitary method

Fraction, 5645.356 turn into fraction

5645.356 turn into fraction

The quotient of 3d3 and 9d5 is, The quotient of 3d 3 and 9d 5 is The ...

The quotient of 3d 3 and 9d 5 is The key word quotient means division so the problem becomes 1d 3 -5/ 5. Divide the coef?cients:  1d 3 /3d-5 . While dividing like bases, subt

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