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

What is converse- inverse and contrapositive, What is Converse, Inverse, an...

What is Converse, Inverse, and Contrapositive In geometry, many declarations are written in conditional form "If ...., then....." For Example: "If two angles are right angles,

Determine how many square centimeters, Determine how many square centimeter...

Determine how many square centimeters of paper are needed to make a label on a cylindrical can 45 cm tall with a circular base having diameter of 20 cm. Leave answer in terms of π.

Evaluate the slope of the tangent line, Evaluate the given limits, showing ...

Evaluate the given limits, showing all working: Using first principles (i.e. the method used in Example 1, Washington 2009, Using definition to find derivative ) find the

Determine the number of blue balls in the bag, A bag contains 5 red balls a...

A bag contains 5 red balls and some blue balls. If the probability of drawing a blue ball is double that of a red ball , determine the number of blue balls in the bag.

Integration, It is known that a radioactive material decays at a rate propo...

It is known that a radioactive material decays at a rate proportional to the amount present.If after a period of 12 years,a 2g piece of radium weighs 1.99g.How long will it be befo

Coordinate geometry, find the value of x for which the distance between the...

find the value of x for which the distance between the points p(4,-5) and q(12,x) is 10 units

Sequence and series, Find the sum og series 1+(1+3)+(1+3+5)+.......+(1+3+.....

Find the sum og series 1+(1+3)+(1+3+5)+.......+(1+3+...+15+17)=

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