A new project has an uncertain cash flow. A group meeting has resulted in a consensus that

Question:

A new project has an uncertain cash flow. A group meeting has resulted in a consensus that a reasonable way to view the possible risks and rewards is to say that the project will pay $50,000 with probability 0.2, will pay $100,000 with probability 0.3, will pay $200,000 with probability 0.4, and will pay $400,000 with probability 0.1. How much risk is involved here? Please give both the name and the numerical value of your answer.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question
Question Posted: