Question

Use the following information to answer the question.                                  &n

Use the following information to answer the question.

                                                                                       Probability                                                    Cash Flow

                                                                                            0.32 $ 60,000

Land    0.50                                                              80,000

                                                                                             0.18                                                            100,000

The risk-free rate is 6%.

Question:

  1. What is the standard deviation of this land investment?

a.   13,937.001

b. 13,862.178

c. 14,009.366

d. 14,339.696

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Answer #1

Ans b. 13,862.178

the standard deviation of this land investment is b. 13,862.178

Probability (P) (P*Y) 32% 50% 18% RETURN (Y) 60000 80000 100000 TOTAL 19200.00 40000.00 18000.00 77200.00 P* (Y-Average Retur

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