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 approximation, approximate value is the precise or the accurate val...

approximate value is the precise or the accurate value which is measured  to the actual value.., approximation is how close the measured value is to the actual value , for example

How to calculate percentiles, Q. How to calculate Percentiles? Ans. ...

Q. How to calculate Percentiles? Ans. In a large group of standardized test scores we expect the scores to approximate a normal curve. If all scores are translated to z-s

Geography, How do you find the maxima or minima on a parabolic graph?

How do you find the maxima or minima on a parabolic graph?

Marketing management, successful marketing research relies on accurate iden...

successful marketing research relies on accurate identification of the research objectives. Critically discuss when setting relevant research objectives, drawing on marketing theor

Constants of integration, CONSTANTS OF INTEGRATION Under this section w...

CONSTANTS OF INTEGRATION Under this section we require to address a couple of sections about the constant of integration. During most calculus class we play pretty quick and lo

Define markov process, Define Markov process. Markov process is one in...

Define Markov process. Markov process is one in which the future value is independent of the past values, given the current value

Determine the number of full withdrawals, A worker retires with a lump sum ...

A worker retires with a lump sum superannuation benefit of $500,000. She immediately invests this money in a fund earning 5% pa effective. One year after retirement she begins maki

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