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

The hurwiz method, The Hurwiz method Hurwiz method was the concept of c...

The Hurwiz method Hurwiz method was the concept of coefficient of optimism or pessimism introduced by L. Hurwicz. The decision maker takes into account both the minimum and max

Systems of differential equations, In the introduction of this section we b...

In the introduction of this section we briefly talked how a system of differential equations can occur from a population problem wherein we remain track of the population of both t

Binary to decimal, 01010011 01100101 01101101 01110000 01100101 01110010 00...

01010011 01100101 01101101 01110000 01100101 01110010 00100000 01000110 01101001 00100001

Express the negation of the statement, States the negation of the statement...

States the negation of the statement ∀x ∃y (xy = 1) so that no negation precedes a quantifier. Ans: The negation of the following statement is written as ~ [∀x ∃y (xy = 1)]. An

Think smarter, compare: 643,251; 633,512; and 633,893. the answer is 633,51...

compare: 643,251; 633,512; and 633,893. the answer is 633,512. what is the question?

Correlation and regression, Correlation and Regression CORRELATION is ...

Correlation and Regression CORRELATION is an important statistical concept which refers to association or interrelationship among variables. The reasons of studying correla

Differential calculus and probability, Josephine is constructing an open bo...

Josephine is constructing an open box by cutting the squares off the corners of a sheet of paper sized 20cm by 16cm. She is considering options of 3cm, 4cm and 5cm squares in order

Properties of logarithms, Properties of Logarithms 1. log a x...

Properties of Logarithms 1. log a xy = log a x + log a y 2.  = log a x - log a y 3. log a x n   = n log

Find the distance of the bird from the girl, A boy standing on a horizontal...

A boy standing on a horizontal plane finds a bird flying at a distance of 100m from him at an elevation of 300. A girl standing on the roof of 20 meter high building finds the angl

Travel time, you are driving on a freeway to a tour that is 500 kilometers ...

you are driving on a freeway to a tour that is 500 kilometers from your home. after 30 minutes , you pass a freeway exit that you know is 50 kilometer from your home. assuming that

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