Multiple Choice
If the economy booms, R&F, Inc. stock is expected to return 16%. If the economy goes into a recessionary period, then R&F is expected to only return 3%. The probability of a boom is 80% while
The probability of a recession is 20%. What is the variance of the returns on R&F stock?
A) .002704
B) .006183
C) .011492
D) .030081
E) .052000
Correct Answer:
Verified
Correct Answer:
Verified
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