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Based on the following information, what is the variance? State of Economy Probability of State of Economy Rate of Return if State Occurs Recession .30
Based on the following information, what is the variance?
| State of Economy | Probability of State of Economy | Rate of Return if State Occurs |
|---|---|---|
| Recession | .30 | −9.80% |
| Normal | .39 | 11.30% |
| Boom | .31 | 22.30% |
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To calculate the variance you can use the following formula textVariance sumi1n PiRi barR2 Where ...
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Corporate Finance Core Principles and Applications
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
5th edition
1259289907, 978-1259289903
