Assume that the Good/Normal/Bad scenarios happen jointly with the first project and that both projects are scalable. Using 10% weight increments, find the mix of the two projects that will provide the largest %drop of the standard deviation of the portfolio ?

Good	NPV: $35,000	Prob 30%
Normal	NPV: -$20,000 (yes negative)	Prob 40%
Bad	NPV: $15,000	Prob 30%

Answer rating: 100% (QA)

To find the mix of the two projects that will provide the largest percentage drop of the standard deviation of the portfolio we need to calculate the standard deviation for different weight combinatio... View the full answer