If the Economy Is Normal, Charleston Freight Stock Is Expected

Multiple Choice

If the economy is normal, Charleston Freight stock is expected to return 14.3 percent. If the economy falls into a recession, the stock's return is projected at a negative 8.7 percent. The probability of a normal economy is 80 percent. What is the variance of the returns on this stock?

A) .100346
B) .008464
C) .007420
D) .073927
E) .094315