What Is the Variance of the Expected Returns on This

question 43

Multiple Choice

What is the variance of the expected returns on this stock?
$$\begin{array} { l c c } \text { State of the Economy } & \text { Erobability } & E ( R ) \\\text { Eoom } & .70 & 24\% \\\text { Recegaion } & .30 & 6\%\end{array}$$

• A)48.75%
• B)52.75%
• C)61.53%
• D)68.04%
• E)70.03%

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Definitions:

Budget Deficit

A situation where a government's expenditures exceed its revenues, leading to a shortfall that must be financed through borrowing.

Budget Surplus

A financial situation where a government's or organization's revenue exceeds its expenditures over a given period.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing and the true yield to lenders or investors.

Budget Surplus

The financial situation in which a government's revenues exceed its expenditures over a specified period of time.