(Answered) Question if a certain property is put up for sale there is

Finance

Question: If a certain property is put up for sale, there is a 50% chance it will sell for $900,000 and a 50% chance it will sell for $1,100,000.

a. What is the market value of this property?

b. What is the standard deviation of the random noise in this property's price as a percentage of its market value?

c. If the property sells for $900,000, what was the ex post NPV from the market value perspective for the seller and the buyer?

d. If the property sells for $1,100,000, what was the ex post NPV from the market value perspective for the seller and the buyer?

e. What is the ex ante NPV from the market value perspective?

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