Portfolio Effects. The projected cash inflows of three projects—X, Y, and Z—for the period 20X1 to 20X5 are given below. Year       Project X ($)      Project Y ($)      Project Z ($) 20X1     ...

Portfolio Effects. The projected cash inflows of three projects—X, Y, and Z—for the period 20X1 to 20X5 are given below.

Year       Project X ($)      Project Y ($)      Project Z ($)

20X1      2,000                     6,000                    1,000

20X2      3,000                    4,000                     2,000

20X3      4,000                    3,000                     3,000

20X4      5,000                     2,000                     3,000

20X5      7,000                     1,000                     6,000

Project X ($)       Project Y ($)       Project Z ($)

A             4,200                     3,200                     3,000

s             3,847                     3,847                     3,742

(a)    Calculate the expected cash inflows and standard deviation of cash inflows for project combinations XY and XZ, and (b) determine the portfolio effects of the above combinations of projects upon the portfolio risk.