Question: 1. Consider two projects: Project A Project B PP 2.2 years 2.8 years IRR 12.5% 18.3% NPV -$15,500 $16,900 Assume that the projects both have

1. Consider two projects:

Project A Project B

PP 2.2 years 2.8 years
IRR 12.5% 18.3%
NPV -$15,500 $16,900

Assume that the projects both have a required return of 14% and a critical acceptance level (T) of 2.6 years. If these are independent projects we should

Consider the following probability distribution

Probability Return
0.10 -100%
0.20 -10%
0.50 20%
0.20 100%

Calculate the standard deviation for this security.

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