1. An investor has projected three possible scenarios for a project as follows:

   PessimisticNOI will be $270,000 the first year, and then decrease 2 percent per year over a five-year holding period. The property will sell for $2.08 million after five years.

   Most likelyNOI will be level at $270,000 per year for the next five years (level NOI) and the property will sell for $2.70 million.

   OptimisticNOI will be $270,000 the first year and increase 3 percent per year over a five-year holding period. The property will then sell for $3.60 million.

   The asking price for the property is $2.70 million. The investor thinks there is about a 30 percent probability for the pessimistic scenario, a 40 percent probability for the most likely scenario, and a 30 percent probability for the optimistic scenario.

   Compute the standard deviation of the IRRs. Remember to enter your answer as a decimal, not as a percentage.