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

Find the area irrigated by this system, An irrigation system uses a straigh...

An irrigation system uses a straight 30m sprinkler pipe which is capped at one end and arranged so that all water is released directly downwards and pivots around a central point.

Determine z-scores and percentiles, Q. Determine Z-scores and Percentiles? ...

Q. Determine Z-scores and Percentiles? Ans. Z-scores help measure how far a piece of data is from the mean. More specifically, Z-scores tell how far a piece of data is fr

Payoff Matrix, A farmer grows apples on her 400-acre farm and must cope wit...

A farmer grows apples on her 400-acre farm and must cope with occasional infestations of worms. If she refrains from using pesticides, she can get a premium for "organically grown"

Rationalize the denominator, Rationalize the denominator for following.  Su...

Rationalize the denominator for following.  Suppose that x is positive. Solution We'll have to start this one off along with first using the third property of radica

Some important issue of graph, Some important issue of graph Before mov...

Some important issue of graph Before moving on to the next example, there are some important things to note. Firstly, in almost all problems a graph is pretty much needed.

Neuro marketing, Does neuro marketing give impetus to new consumer behavio...

Does neuro marketing give impetus to new consumer behaviour

Decision theory, Decision Theory Decisions There are many types of ...

Decision Theory Decisions There are many types of decision making 1.      Decision making under uncertainty It refer to situations where more than one outcome can r

Trig, without using a calculator how would you know is cos theta(20) is gre...

without using a calculator how would you know is cos theta(20) is greater than cos theta (35)

Debate over answer to an equation..., The math equation is written exactly ...

The math equation is written exactly this way: 0+50x1-60-60x0+10=??? The answer I get is 10 and others say 0 0+50=50 50x1=50 50-60=-10 -10-60=-70 -70x0=0 0+10=10

Ratio, 2qt :6qt::x :48? help me solve x

2qt :6qt::x :48? help me solve x

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