Aproject has a 60% chance of doubling your investment in 1 year and a 40% chance of losing half your money. what is the standard deviation of this investment?

The standard deviation is 0.73 times the value of your investment

Explanation:

Standard deviation is the measure of dispersion from the mean of the group as a whole.

It is a group statistic, so it is necessary to see the project's result as a group result.

Let P be the value of your investment.

If you can invest 100 times in the project then after 1 year you will receive 2P for 60 times and 0.5P for 40 times. The 40% ad 60% information is not conditioned on a sample so the case should be considered a measurement on population.

Mean = =

Variance =

=

Standard Deviation = = = 0.73P

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