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 0.20 0.40 $120 130 140 Year 1 Year 5 Year 10 $110 130 150 Standard Deviation 0.30 0.35 Year 10 O Cash Inflow $100 130 160 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.) Probability 0.30 0.40 0.30

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
Year 5
Cash Inflow Probability Cash Inflow Probability
$ 120
0.40
0.35
130
0.20
140
0.40
Year 1
Year 5
Year 10
$110
130
150
Standard Deviation
0.30
0.35
Year 10
Cash Inflow
$ 100
130
160
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.)
Probability
0.30
0.40
0.30
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 Year 5 Cash Inflow Probability Cash Inflow Probability $ 120 0.40 0.35 130 0.20 140 0.40 Year 1 Year 5 Year 10 $110 130 150 Standard Deviation 0.30 0.35 Year 10 Cash Inflow $ 100 130 160 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.) Probability 0.30 0.40 0.30
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