what does 'high variance' mean on mortgage

Similarly, if two different securities have approximately the same variance, the one with the higher return is the better pick. If two different securities have the same expected return, but one has lower variance, the one with lower variance is the better pick. For example, variance may tell how spread out the returns of a specific security are on a daily or weekly basis. The expected return is a probability expressing the estimated return of the investment in the security. I think that when we say the word explain, we dont actually mean that we explain something and its a metaphorical way of using it but Im not. By adding our independent variable x x in the model, we want it to explain some of this variance. Variance is a number that represents how varied or spread out the numbers are in a set. The variance of the random variable y y is the distance of the observartions from the mean value of y y. One assumption is that investors seek low risk and high reward. There are two main components tof mean-variance analysis: variance and expected return. Mean-variance analysis is one part of modern portfolio theory, which assumes that investors will make rational decisions about investments if they have complete information. Similarly, if two different securities have approximately the same variance, the one with the higher return is preferred.If two different securities have the same expected return, but one has lower variance, the one with lower variance is preferred.The expected return is a probability expressing the estimated return of the investment in the security.The variance shows how spread out the returns of a specific security are on a daily or weekly basis.

The analysis helps investors determine the biggest reward at a given level of risk or the least risk at a given level of return.Mean-variance analysis is a tool used by investors to weigh investment decisions.

What does 'high variance' mean on mortgage