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

Properties of summation notation, Properties Now there are a couple of ...

Properties Now there are a couple of formulas for summation notation. 1. here c is any number. Therefore, we can factor constants out of a summation. 2. T

Demerits and merit-the mode, The mode Merits i.  This can be dete...

The mode Merits i.  This can be determined from incomplete data given the observations along with the highest frequency are already known ii.  The mode has some applic

Relationship between inverse and sine function, Relationship between the in...

Relationship between the inverse sine function and the sine function We have the given relationship among the inverse sine function and the sine function.

Determine the number of combinations, 3 items x, y and z will have 6 differ...

3 items x, y and z will have 6 different permutations however only one combination. The given formular is generally used to determine the number of combinations in a described situ

Statistics, what is the meaning of statistics

what is the meaning of statistics

Find the total volume of the hay stack, The lower portion of a hay stack is...

The lower portion of a hay stack is an inverted cone frustum and the upper part is a cone find the total volume of the hay stack.

Metric Units, How do I convert metric units?

How do I convert metric units?

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