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

Describe about absolute values, Describe about Absolute Values ? When a...

Describe about Absolute Values ? When an integer is written with a vertical line on each side of the integer, it is called the absolute value of that integer. For example,

Geometry, how do you find the length of a parallel line connecting two exte...

how do you find the length of a parallel line connecting two external circles of different sizes from the outside, given the value of both radius and one parallel line.

Fractions, What is two-thirds plus two-thirds?

What is two-thirds plus two-thirds?

Describe the types of triangles, Describe the Types of triangles ? Tria...

Describe the Types of triangles ? Triangles can be classified according to the lengths of the sides or the measures of the angles. 1. Naming triangles by sides An

What fraction of water flows out, A conical vessel of radius 6cm and height...

A conical vessel of radius 6cm and height 8cm is completely filled with water. A sphere is lowered into the water and its size is such that when it touches the sides, it is just im

Algebra, Evaluate: 30 - 12÷3×2 =

Evaluate: 30 - 12÷3×2 =

Word problem, A computer is programmed to scan the digits of the counting n...

A computer is programmed to scan the digits of the counting numbers.For example,if it scans 1 2 3 4 5 6 7 8 9 10 11 12 13 then it has scanned 17 digits all together. If the comput

Decision trees illustration, A company is considering whether to enter a ve...

A company is considering whether to enter a very competitive market. In case company decided to enter in market this must either install a new forging process or pay overtime wages

Find homeomorphisms - complex root, All numbers refer to exercises (and not...

All numbers refer to exercises (and not "computer exercises") in Gallian. §22: 8, 16, 22, 24, 28, 36. In addition: Problem 1: Let a be a complex root of the polynomial x 6 +

Judgment sampling, Judgment Sampling Here the interviewer chooses whom ...

Judgment Sampling Here the interviewer chooses whom to interview believing that their view is more fundamental because they might be directly affected for illustration, to find

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