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This is finance Assume that you are considering another trade opportunity that involves shipping natural gas from North Dakota to Massachusetts. The current price of
This is finance
Assume that you are considering another trade opportunity that involves shipping natural gas from North Dakota to Massachusetts. The current price of natural gas in Massachusetts is $3.50 per Mmbtu. For you to break even on this trade the price needs to be $3.90 per Mmbtu. Although the expected daily return for natural gas prices in Massachusetts is 0%, the standard deviation of these returns is greater than zero. What can be said about how the standard deviation of returns for natural gas prices in Massachusetts affects the probability of you making money on this trade? Hint: Think about what happens if standard deviation is zero. O The higher the standard deviation of natural gas prices, the lower the probability that you will make money on this trade. O The higher the standard deviation of natural gas prices, the greater the probability that you will make money on this trade. NextStep by Step Solution
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