You are trying to decide whether to invest some idle cash, Financial Management

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You are trying to decide whether to invest some idle cash

You are trying to decide whether to invest some idle cash in undeveloped land. You intend to hold the investment for five years before selling out and sailing the Caribbean. You have made the following estimates of the value of the land five years from now: Probability Cash Flow 0.3 $ 60,000 Land 0.5 80,000 0.2 100,000 The risk-free rate is 6%. What is the expected value of this land investment? What is the standard deviation of this land investment?

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Financial Management: You are trying to decide whether to invest some idle cash

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