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

Trigonometric ratios, to difine trigonometric ratios of an angle,is it nece...

to difine trigonometric ratios of an angle,is it necessary that the initial ray of the angle must be positive x-axis?

Online tutoring, how can i find the online students ?

how can i find the online students ?

Linear graph, in the form of linear graph interpret the ralationship betwee...

in the form of linear graph interpret the ralationship between two quantities

Explain lobachevskian geometry and riemannian geometry, Explain Lobachevski...

Explain Lobachevskian Geometry and Riemannian Geometry ? Nineteenth century mathematician Nicolai Lobachevsky assumed that the summit angles of a Saccheri quadrilateral are ac

Integration, R={(r, ?):1=r= 2cos? ,-p/3= ? =p/3

R={(r, ?):1=r= 2cos? ,-p/3= ? =p/3

Find and classify all the equilibrium solutions, Find and classify all the ...

Find and classify all the equilibrium solutions to the subsequent differential equation. y' = y 2 - y - 6 Solution First, get the equilibrium solutions. It is generally

Probability distributions, Probability Distributions Since the value of...

Probability Distributions Since the value of a random variable cannot be predicted accurately, by convention, probabilities are assigned to all the likely values that the varia

., 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

Describe the properties of inequalities, Describe the Properties of Inequal...

Describe the Properties of Inequalities ? Postulate In comparing two quantities, say a and b, there are exactly three possibilities. (1) a is less than b. (a b)

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