Computing coefficient of variation

Reference no: EM1366645

Mr. Sam Golff wants to invest a portion of his assets in rental property. He has narrowed his choices down to two apartment complexes, Palmer Heights and Crenshaw Village. After conferring with the present owners, Mr. Golff has developed the following estimates of the cash flows for these properties (see attached file).

Palmer Heights

Yearly After Tax cash flows Probability

10 0.1
15 0.2
30 0.4
45 0.2
50 0.1

Crenshaw Village

Yearly After Tax cash flows Probability

15 0.2
20 0.3
30 0.4
40 0.1

a. Find the expected cash flow from each apartment complex.
b. What is the coefficient of variation for each apartment complex?
c. Which apartment complex has more risk?

Reference no: EM1366645

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