What Is the Variance of the Expected Returns on This

question 73

Multiple Choice

What is the variance of the expected returns on this stock?
$\begin{array}{lrr}\text { State of the Economy } & \text { Probability of } & \text { Rate of Return if } \\& \text { State of Economy } & \text { state occurs }\\\text { Boom } & .30& 20\% \\\text { Normal } & .70 &10 \%\end{array}$

• A)18.75%
• B)21.00%
• C)31.53%
• D)48.97%
• E)50.03%

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Definitions:

Postdecisional Dissonance

The psychological conflict or discomfort experienced after making a difficult decision, often leading to regret or rationalization of the choice.

Balance Theory

A psychological theory suggesting that people prefer harmony and consistency in their views, beliefs, and sentiments, and will change or modify them to achieve balance.

Unit Relations

The dynamics and interactions within and between units or groups in an organization, affecting its harmony and productivity.

Post-Racial

A theoretical environment in which the concept of race is said to be irrelevant; often criticized as being an ideal rather than reality.