What is the market value of the property

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Question: If a certain property is put up for sale, there is a 50% chance it will sell for $900,000 and a 50% chance it will sell for $1,100,000.

a. What is the market value of this property?

b. What is the standard deviation of the random noise in this property's price as a percentage of its market value?

c. If the property sells for $900,000, what was the ex post NPV from the market value perspective for the seller and the buyer?

d. If the property sells for $1,100,000, what was the ex post NPV from the market value perspective for the seller and the buyer?

e. What is the ex ante NPV from the market value perspective?

Reference no: EM131734401

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