What is the risk of this project

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Reference no: EM132035268

Solve the given question

We are uncertain about the project. The annual profit has two outcomes, a gain $700 or a loss $(-300). The probability of a loss is 0.2.

The useful life has two outcomes: either 5 or 2 years, each with probability 0.5.

The life and the benefit are independent. What is the risk of this project (measured by the standard deviation)?

Reference no: EM132035268

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