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

Interpolation and extrapolation, Interpolation is a method of s...

Interpolation is a method of statistical estimation and the word literally means 'making insertions'. Let us consider a well-known situation whi

Continuous Probability Distributions, Ask questioOn average, Josh makes thr...

Ask questioOn average, Josh makes three word-processing errors per page on the first draft of his reports for work. What is the probability that on the next page he will make a) 5

Write radicals in exponent form, Write each of the given radicals in expone...

Write each of the given radicals in exponent form. Solution As illustrated in the last two parts of this example we have to be careful with parenthesis.  While we

Vector calculus, If F ( x,y, z) = x y² y4 i + ( 2x2 y + z) j - y3 z² k, fin...

If F ( x,y, z) = x y² y4 i + ( 2x2 y + z) j - y3 z² k, find: i). question #Minimum 100 words accepted#

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

Definition of the definite integral , Using the definition of the definite ...

Using the definition of the definite integral calculate the following.                                                             ∫ 0 2  x 2   + 1dx Solution Firstly,

Surds and logarithms, what are these all about and could i have some exampl...

what are these all about and could i have some examples of them please

Precalculus help, tsunami equation A sin (b * t) + k what is b supposed t...

tsunami equation A sin (b * t) + k what is b supposed to be if t is time a is amplitude and k is average water level (not exact value of b just what is it)

Determine the size of the proposed repayments, Five years ago a business bo...

Five years ago a business borrowed $100,000 agreeing to repay the principal and all accumulated interest at 8% pa compounded quarterly, 8 years from the loan date. Two years after

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