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

question 64

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

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