What Is the Variance of the Expected Returns on This

question 29

Multiple Choice

What is the variance of the expected returns on this stock?
$\begin{array}{lcr}\text { State of the Economy } & \text { Probability } & E(R) \\\text { Boom } & .35 & 18 \% \\\text { Recession } & .65 & 8\%\end{array}$

• A)18.75%
• B)22.75%
• C)31.53%
• D)48.97%
• E)50.03%

---

Definitions:

IR

Short for Infrared Spectroscopy, a technique used to identify and study chemicals by analyzing the infrared light absorbed by molecules.

Carbonyl

A functional group characterized by a carbon atom double-bonded to an oxygen atom (C=O), central to many organic reactions and compounds.

Infrared Radiation

A form of electromagnetic radiation with longer wavelengths than visible light, used in heating and imaging technologies.

Alkene Absorption

Refers to the specific wavelengths at which alkenes absorb infrared light due to the stretching vibrations of the carbon-carbon double bond.