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

Average function value, Average Function Value The average value of a ...

Average Function Value The average value of a function f(x) over the interval [a,b] is specified by, f avg = (1/b-a) a ∫ b f(x) dx Proof We know that the average

Theorem of continuous functions, Consider the subsequent IVP. y' = f(t,y...

Consider the subsequent IVP. y' = f(t,y) ,        y(t 0 ) = y 0 If f(t,y) and ∂f/∂y are continuous functions in several rectangle a o - h o + h which is included in a

Find lim sup, 1.find lim sup Ek and liminf Ek of Ek=[(-(1/k),1] for k odd a...

1.find lim sup Ek and liminf Ek of Ek=[(-(1/k),1] for k odd and liminf Ek=[(-1,(1/k)] for k even.  2.Show that the set E = {x in R^2 : x1, x2 in Q} is dense in R^2.  3.let r>0 an

Tangent, construction of tangent when center not known

construction of tangent when center not known

Probability, There are 20 defective bulbs in a box of 100 bulbs.if 10bulbs ...

There are 20 defective bulbs in a box of 100 bulbs.if 10bulbs are choosen at random then what is the probability of there are just 3defective bulbs

Vectors, A plane is flying at 200 mph with a heading of 45degrees and encou...

A plane is flying at 200 mph with a heading of 45degrees and encounters a wind mph from the west. What is the velocity and heading?

how much error, For a population with a mean of μ=70 and a standard deviat...

For a population with a mean of μ=70 and a standard deviation of o=20, how much error, on average, would you expect between the sample mean (M) and the population mean for each of

Quadriatic-equations, Q. a(b - c)x^2 + b(c - a)x + c(a - b) = 0 has equal r...

Q. a(b - c)x^2 + b(c - a)x + c(a - b) = 0 has equal roots then b = ? Ans: Condition that a quadratic equation ax² + bx + c = 0 has equal roots is: Its discriminant, b² - 4ac = 0 A

Union and intersection - set theory, Union and Intersection - Set theory ...

Union and Intersection - Set theory B ∩ C indicates the intersection of B and C. it is the set having all those elements that belong to both B and C If B = {5, 8, 11, 20, 2

Explain adding and subtracting in scientific notation, Explain Adding and S...

Explain Adding and Subtracting in Scientific Notation? To add or subtract numbers in scientific notation, the numbers must be expressed so that they have the same exponent.

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