Question
please help The rates of return for a stock are as follows: 2% if the state of the economy is recession, 8% if the state
please help
The rates of return for a stock are as follows: 2% if the state of the economy is recession, 8% if the state of the economy is normal, and 11% if the state of the economy is expansion. The probability for each state of the economy is 25%, 45%, and 30%, respectively. Assume the stock has an expected rate of return of 7.4%. What is the variance for this stock?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
