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    Standard deviation of possible sales prices

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    I have decided to invest in a piece of real estate. Management has estimated that the real estate can be sold in 5 years for the following possible prices:

    Price Probability
    $20,000 0.20
    $25,000 0.25
    $30,000 0.30
    $35,000 0.25

    What is the standard deviation of possible sales prices?

    © BrainMass Inc. brainmass.com June 3, 2020, 9:11 pm ad1c9bdddf

    Solution Preview

    To calculate the standard deviation, we need to calculate the expected price

    Expected price = Sum (Probability X associated price)
    Expected ...

    Solution Summary

    The solution explains how to calculate the standard deviation of possible sales prices