An Investor Is Analyzing the Risk of a Possible Investment

question 7

Multiple Choice

An investor is analyzing the risk of a possible investment by producing three different scenarios.Under a pessimistic scenario,the property would produce a BTIRRp of 8%; a most-likely scenario would produce a BTIRRp of 12%; and an optimistic scenario would produce a BTIRRp of 16%.The investor assigns the pessimistic scenario a 25% chance of occurring,the most-likely case a 60% chance of occurring,and the optimistic scenario a 15% chance of occurring.What is the standard deviation of the returns?

• A)0.062%
• B)1.248%
• C)2.498%
• D)2.904%

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Definitions:

Office Supplies

Consumable items used in an office setting, such as paper, pens, and staplers, necessary for completing office tasks and operations.

Weekly Salary

A fixed amount of money paid to an employee on a weekly basis as compensation for performed work.

Utility Bill

A bill for services provided by a utility company, such as electricity, water, natural gas, or telecommunications.

Owner's Equity

The residual interest in the assets of a business after deducting liabilities, representing the capital owned by the owners or shareholders.