The Rate of Return on the Common Stock of Flowers

question 25

Multiple Choice

The rate of return on the common stock of Flowers by Flo is expected to be 14% in a boom economy, 8% in a normal economy, and only 2% in a recessionary economy. The probabilities of these economic states are 20% for a boom, 70% for a normal economy, and 10% for a recession. What is the variance of the returns on the common stock of Flowers by Flo?

• A) 0.001044
• B) 0.001280
• C) 0.001863
• D) 0.002001
• E) 0.002471

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Definitions:

Hygiene

Practices and conditions that help maintain health and prevent the spread of diseases, primarily through cleanliness and sanitation.

Critical Item

An essential element or factor that is crucial for the successful completion of a task or the proper functioning of a system.

Noncritical Item

An item or aspect that, though part of a system or process, is not essential to its fundamental operation or success.

Steam Sterilization

A method of sterilization using saturated steam under pressure to eliminate all forms of microbial life, including spores.