Homework Answers
1.
=Sum(probability*cash flows)
=0.1*1000+0.3*2000+0.4*3000+0.2*4000
=2700
2.
=-2800+2700/10%*(1-1/1.1^3)
=3914.500376
3.
=sqrt(0.1*(1000-2700)^2+0.3*(2000-2700)^2+0.4*(3000-2700)^2+0.2*(4000-2700)^2)
=900
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