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If the economy booms, RTF, Inc., stock is expected to return 12 percent. If the economy goes into a recessionary period, then RTF is expected
If the economy booms, RTF, Inc., stock is expected to return 12 percent. If the economy goes into a recessionary period, then RTF is expected to only return 5 percent. The probability of a boom is 79 percent while the probability of a recession is 21 percent. What is the variance of the returns on RTF, Inc., stock? Question 1 options: A) 0.052650 B) 0.000642 C) 0.028512 D) 0.000471 E) 0.000813
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