Q 1- A project requires an immediate cash outflow of 300 million in return for the following probable cash flows: State of Economy Probability of State of Economy & in million in million Year 1 Year 2 0.2 300 0.5 0.3 130 350 440 Recession 800 Growth Boom 900 Assume that the state of economy will be the same in the second year as in the first. The required rate of return is 7%. There is no tax or inflation. Required: a- Calculate the expected NPV b- Calculate the standard deviation of NPV Q 2 - What is the holding-period return for a share which costs 5.50, was held for a year and then sold for 3.5, and which paid a dividend at the end of the holding period of 20p? Interpret the result