2.

value: 4.00 points

MC Qu. 103 If the economy booms, RTF, Inc. stock is expected to retur...

If the economy booms, RTF, Inc. stock is expected to return 11 percent. If the economy goes into a recessionary period, then RTF is expected to only return 3 percent. The probability of a boom is 73 percent while the probability of a recession is 27 percent. What is the variance of the returns on RTF, Inc. stock?

.035517

.000580

.001261

.000921

.044200