If the Economy Booms,RTF,Inc

question 58

Multiple Choice

If the economy booms,RTF,Inc. stock is expected to return 10%. If the economy goes into a recessionary period,then RTF is expected to only return 4%. The probability of a boom is 60% while the probability of a recession is 40%. What is the variance of the returns on RTF,Inc. stock?

• A) .000200
• B) .000760
• C) .000864
• D) .001594
• E) .029394

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Definitions:

Cognitive Development

The study of how thinking, problem solving, and intelligence evolve as people grow, typically focusing on childhood development stages.

Centration

The cognitive tendency in young children to focus on one aspect of a situation while neglecting others, often observed in preoperational stage of Piaget's theory of cognitive development.

Problem Solving

The process of identifying a challenge and finding an effective solution for it.

Cognitive Development

The process by which individuals acquire and evolve their thinking abilities, including perception, logic, memory, and language.