This allows different investments to be compared in terms of the trade-off between expected reward (measured by mean return) and risk (measured by the variance of returns).
Subjects first design a portfolio, whereby each combination of assets yields the same expected return and variance of returns.
This study found that trading margins, credit availability, and price discreteness affect the variance of returns in the Indian futures markets.
Therefore, this study established empirically the null-hypothesis that trading margins, credit availability, and price discreteness did not affect the variance of returns in the Indian futures market.
This study rejected the null-hypothesis and concluded that trading margins, credit availability, and price discreteness affect the variance of returns in the Indian futures markets.
In the economic literature (e.g.,[ 67, 68]) as well as in neuroimaging studies of decision making [ 7, 9], risk is operationalized as the variance of returns within an option.
In finance, the risk associated with a portfolio of investments, as measured by the variance of the return on the portfolio, is a nonlinear function of the amounts invested in each security in the portfolio.
The variance of stock returns for the market as a whole went up to, like, sixty per cent a year — the Vix measure of volatility was running at about sixty per cent.
Another stylized fact of the IT literature is the large variance of IT returns among firms [14].
The purpose for V-IGARCH (1, 1) is used to observe the positive effects of credit availability on the variance of futures returns.
