RTF Stock Is Expected to Return 11 Percent in a Normal

question 37

Multiple Choice

RTF stock is expected to return 11 percent in a normal economy and lose 15 percent in a recession.The probability of a recession is 33 percent and the probability of a booming economy is zero.What is the variance of the returns on RTF stock?

• A)0)019093
• B)0)013760
• C)0)017864
• D)0)014946
• E)0)019394

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