Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A stock has an expected rate of return of 13.5% The rate of return for this stock is 9% if the state of the economy

image text in transcribed
A stock has an expected rate of return of 13.5% The rate of return for this stock is 9% if the state of the economy is recession, 14% if the state of the economy is normal and 18% of the state of the economy is expansion. The probability for each state of the economy is 30% 45% and 25% respectively What is the variance for this stock? Do not found intermediate calculations. Round the final answer to 5 decimal places. Omit any commos in your response. For example, an answer of 100050 should be entered as 1000.50

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Financial Management Fundamentals

Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao

1st Edition

0324015771, 9780324015775

More Books

Students also viewed these Finance questions