# Standard deviation of possible sales prices

A firm has 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 Possibility

$20,000 .20

$25,000 .25

$30,000 .30

$35,000 .25

What is the standard deviation of possible sales prices?

(First determine expected sales price).

https://brainmass.com/statistics/variance/standard-deviation-possible-sales-prices-example-problem-30614

#### Solution Preview

Expected price = summation of pi Xi

Sale price (Xi) Probability (Pi) Pi Xi

$20,000 0.2 $4,000

$25,000 0.25 $6,250

$30,000 0.3 $9,000

$35,000 ...

#### Solution Summary

The solution calculates standard deviation of possible sales prices.

$2.19