If the Economy Booms,RTF AB Equity Is Expected to Return

Multiple Choice

If the economy booms,RTF AB equity is expected to return 10%.If the economy goes into a recessionary period,then RTF is expected to only return 4%.The probability of a boom is 60% while the probability of a recession is 40%.What is the variance of the returns on RTF?

A) .000200
B) .000760
C) .000864
D) .001594
E) .029394