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Problem 3 . Consider the following cash flows of a project with N = 2 and i = 1 0 % . ( a )
Problem Consider the following cash flows of a project with and
a Assuming that the cash flows are independent of each other, find the mean and the standard
deviation of the NPV of this project.
b Assuming that the cash flows have the following correlation coefficients, find the mean and the
standard deviation of the NPV
;;
c Assuming that the cash flows are perfectly positively correlated, find the mean and the standard
deviation of the NPV
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