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can you answer this one The market risk premium is 9.25%. The rates of return for a stock are as follows: 2% if the economic
can you answer this one
The market risk premium is 9.25%. The rates of return for a stock are as follows: 2% if the economic state is recession; 9% if the economic state is normal; and 12% if the economic state is expansion. The probablities of the economic states are as follows: 45% probability of recession; 35% probability of normal; and 20\% probablity of expansion. Assume the expected return for this stock is 6.45%. What is the variance for this stock? Do not round intermediato cakculations. Round the final answer to 5 decimal places. For example, an answer of 0.123456789 should be entered as 0.12345 (not 12.34567/) Step by Step Solution
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