The Oklahoma Pipeline Company projects the following pattern of inflows from an investment. The inflows are spread over time to reflect delayed benefits. Each year is independent of the others. Year 1 Year 5 Cash Inflow Probability Cash Inflow Probability 0.40 0.35 $120 130 140 0.20 9.40 Year 1 Year 5 Year 10 $110 130 150 0.30 0.35 Standard Deviation Year 10 Cash Inflow Probability 0.30 0.40 0.30 The expected value for all three years is $130. Compute the standard deviation for each of the three years. (Do not round intermediate calculations. Round your answer to 2 decimal places.) $100 130 160

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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The Oklahoma Pipeline Company projects the following pattern of inflows from an investment. The inflows are spread over time to
reflect delayed benefits. Each year is independent of the others.
Year 1
Cash Inflow Probability
0.40
$120
130
140
0.20
0.40
Year 1
Year 5
Year 10
Year 5
Cash Inflow Probability
$110
0.35
130
0.30
150
0.35
Year 10
Cash Inflow Probability
0.30
0.40
0.30
The expected value for all three years is $130.
Compute the standard deviation for each of the three years. (Do not round intermediate calculations. Round your answer to 2
decimal places.)
Standard Deviation
$100
130
160
Transcribed Image Text:The Oklahoma Pipeline Company projects the following pattern of inflows from an investment. The inflows are spread over time to reflect delayed benefits. Each year is independent of the others. Year 1 Cash Inflow Probability 0.40 $120 130 140 0.20 0.40 Year 1 Year 5 Year 10 Year 5 Cash Inflow Probability $110 0.35 130 0.30 150 0.35 Year 10 Cash Inflow Probability 0.30 0.40 0.30 The expected value for all three years is $130. Compute the standard deviation for each of the three years. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Standard Deviation $100 130 160
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