Please boost your Plan to download papers

Got a tricky question? Receive an answer from students like you!
Try us!

#
Essay example - Standard Deviation

Essay

Miscellaneous

Pages 10 (2510 words)

Every rational investor wants to invest money in an investment which will give him more money. But the question arises how can one make choice between a set of investments There are number of theories regarding how an investor view risk and prefers one investment over the other ones.

…

Get more done in less time

Let us write a custom essay on your topic

“Standard Deviation” with a personal
15% discount.

Order now
## Extract of sample

When the data points are spread apart and the bell-shaped curve is flat, the standard deviation -- and the variation -- is great.

Standard deviation with regard to finance can be defined as "Statistical measure that shows the likelihood of an investment to yield above- or below-average returns over a period of time. For example, if hypothetical XYZ Fund has an average annual total return of 11% and a standard deviation of 6.00, which means XYZ Fund's performance is likely to vary from a low of 5% to a high of 17%. Calculated by the fund, standard deviation is only relative to the asset class being measured." (2)

The standard deviation of investment returns is widely accepted as the best, and perhaps only commonly used indicator of portfolio risk in the investment management business. However, its usefulness is actually quite limited. In fact, relying on it can often produce misleading and inaccurate

conclusions. Although standard deviation does provide some insight, and in many circumstances is in fact meaningful but there are a number of flaws associated with relying on the standard deviation of returns as a risk measure.

The bigger flaw with standard deviation is that it isn't intuitive. ...

Download paper
Not exactly what
you need?

### Related papers

Research Proposal Design
Standard deviation = $21,200. Standard deviation is calculated as the square root of the variance; variance is calculated as follows, where M is the mean and N is the total number of scores.…

Risk and Returns Calculations – Impact of Mathematics in Finance
Financial calculations and theories are not complete and effective unless they are linked with Mathematical concepts. Indeed there has been a great impact of mathematics in the financial stream. The mathematical concepts has enable the business doing individuals take more effective decisions related to financing, investments, capital budgeting and so on. Moreover, an investment decision calls for…

MA205- Elementary Statistics
T critical is greater than T calculated so we accept the null hypothesis that the change as a result of training is equal to zero, therefore the training makes some positive change towards those who are mentally retarded.

Memory Process Serial Position Effect
Atkinson & Shiffrin (1968) tried to explain the primacy serial position effect as a result of the greater attention allocated to the first and last items on a list. This improves the probability of recalling such items in long-term memory. They explained recency serial position effect as being recalled by short-term memory as last items were last viewed through the list.…

Data Analysis Research Paper
Central tendency of the number of new cases every year is measured using the mean value. The mean of new cases among all 19 age groups are 6288 new case per year. The range of new cases is 19,477 with minimum number of case equal to 60 and maximum value equal to 19,537 for the ages between 70 and 74.…