Calculation of standard deviation

Reference no: EM1310983

Calculation of Standard Deviation.

Annual net cash flow projections for two properties ($1,000,000s):

The table below shows the projected net cash flows (including reversion) for Property A and Property B. If both properties sell at fair market value for a cap rate (initial and terminal net cash yields) of 7%, then which of these two properties is perceived to be riskier by the market? Why?


Year:	1	2	3	4	5	6	7	8	9	10
A	$1.0000	$1.0000	$1.0000	$1.0000	$1.0000	$1.0000	$1.0000	$1.0000	$1.0000	$15.2857
B	$1.0000	$1.0200	$1.0404	$1.0612	$1.0824	$1.1041	$1.1262	$1.1487	$1.1717	$18.6093

Reference no: EM1310983

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