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

Problem, a mixture of 40 liters of milk and water contains 10% water.how mu...

a mixture of 40 liters of milk and water contains 10% water.how much water should be added to this so that water my be 20% in the new mixture

Ratio, what is the simplest form of 6:9?

what is the simplest form of 6:9?

What is unitary method, Explanation of  Unitary Method Unitary Method k...

Explanation of  Unitary Method Unitary Method keeps of following two steps:-      Step 1 involves find the value of one unit.      Step 2 involves find the value of requi

NCCER, what is 9/16 Divided by 7/8

what is 9/16 Divided by 7/8

Determine series is convergent or divergent by radio test, Determine if the...

Determine if the following series is convergent or divergent by using Radio Test. Solution With this first illustration let's be a little careful and ensure that we h

Solve following x - x e 5 x + 2 = 0 logarithms, Solve following  x - x  ...

Solve following  x - x  e 5 x + 2   = 0 . Solution : The primary step is to factor an x out of both terms. DO NOT DIVIDE AN x FROM BOTH TERMS!!!! Note as well that it i

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