Question $3$

$3pts$

If the economy booms, RTF$,$ Inc., stock is expected to return $9$ percent. If the economy goes into a recessionary period, then RTF is expected to only return $4$ percent. The probability of a boom is $68$ percent while the probability of a recession is $32$ percent. What is the variance of the returns on RTF$,$ Inc., stock?

$0\mathrm{.}023324$

$0\mathrm{.}006582$

$0\mathrm{.}000370$

$0\mathrm{.}000196$

$0\mathrm{.}000544$