Harry W. Markowitz, the father of “Modern Portfolio theory”, developed the mean-variance analysis, which focuses on creating portfolios of assets that minimizes the variance of returns i.e. risk, given a level of desired return, or maximizes the returns given a level of risk tolerance. This theory aids the process of portfolio construction by providing a quantitative take on it. It integrates the field of quantitative analysis with portfolio management. Mean variance analysis has found wide applications both inside and outside financial economics. However it is based on certain assumptions which do not hold good in practice. Hence there have been certain revisions to it, so as to make it a more useful tool in portfolio management. Mean Variance Analysis

Within the mean variance approach of Markowitz, the basic assumption is that risk is measured by variance, and the investment decision is based on the trade-off between higher mean and lower variance of the returns. The locus of optimal mean-variance combinations is called the efficient frontier, on which all rational investors would desire to be positioned. Asset returns are assumed to be (jointly) normally distributed random variables, and correlations between assets are also assumed to be fixed and constant forever. (Mz)

Other assumptions include: (Mz)

All investors aim to maximize economic utility (in other words, to make as much money as possible, regardless of any other considerations).
All investors are rational and risk averse.
All investors have access to the same information at the same point of time. It assumes efficient market hypothesis holds good and there is no information asymmetry or insider trading.
Investors have an accurate conception of possible returns, i.e., the probability beliefs of investors match the true distribution of returns. Investor’s beliefs are unbiased.
There are no taxes or transaction costs. It assumes perfect markets.
All investors are price takers i.e....

...Analysis of Variance
Lecture 11 April 26th, 2011
A. Introduction
When you have more than two groups, a t-test (or the nonparametric equivalent) is no longer applicable. Instead, we use a technique called analysis of variance. This chapter covers analysis of variance designs with one or more independent variables, as well as more advanced topics such as interpreting significant interactions, and unbalanced...

...INTRODUCTION TO ONE-WAY ANALYSIS OF VARIANCE
Dale Berger, Claremont Graduate University http://wise.cgu.edu
The purpose of this paper is to explain the logic and vocabulary of one-way analysis of variance (ANOVA). The null hypothesis tested by one-way ANOVA is that two or more population means are equal. The question is whether (H0) the population means may equal for all groups and that the observed...

... 2/21/2014
274 EXERCISE 36 • Analysis of Variance (ANOVA) I
1. The researchers found a significant difference between the two groups (control and treatment) for change
in mobility of the women with osteoarthritis (OA) over 12 weeks with the results of F(1, 22) 9.619,
p 0.005. Discuss each aspect of these results. F is the statistic for ANOVA. F (1,22) one represents the number of groups in the study and 22 equals the subjects used the error...

...www.ccsenet.org/ijbm International Journal of Business and Management Vol. 7, No. 10; May 2012
134 ISSN 1833-3850 E-ISSN 1833-8119
Comparative Analysis of Commercial Banks Liquidity Position: The
Case of Tanzania
Xuezhi Qin1 & Dickson Pastory1
1 School of Business Management, Dalian University of Technology, Dalian, China
Correspondence: Dickson Pastory, School of Business Management, Dalian University of Technology, Dalian
116024, China. Tel: 86-188-4268-6991. E-mail:...

...case study, we conclude that we need to do a varianceanalysis to better understand the plant performance compared to the previous year. The main problem in related to this case is about the falling in revenues, the performance of coal-plant, the price of coal and the quality of coal. All of this problem will be answered in the next sections in the qualitative analysis of Luotang Power.
VARIANCEANALYSIS
QUANTITY...

...(measure of overall variation of estimated sales from observed sales), assuming that the sum of error is equal to zero. Thus the error is given by,
Thus we need to minimize the above in such a way that the estimated values minimize the above error variance. Minimizing the above with respect to a and b we get the following two equations to obtain the estimated values of a and b as follows,
and
From the above the estimated b is (to be remembered for your calculation...

...BUDGET MANAGEMENT ANALYSIS
To have a basis in illustrating the analysis of variance or difference between budgeted and actual figures, the budget of a sampled (unknown) company was utilized (http://www.smallbusinessnotes.com/business-finances/budgeting-systems.html).
| | | | | | |...

...DESIGN AND ANALYSIS OF EXPERIMENTS
TERM PROJECT PROPOSAL
Subject: Statistical analysis of a sling regarding three factors with three levels.
Aim: Our aim is to statistically analyse the effects of three factors; rubber type, shooting range and tensile distance on the shooting range.
Description: In our project, we will design three slings for three types of rubbers.With these slings, we will try three shooting angles;30, 45, 60 degrees. Also with these...

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