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Question 5: If the economy flourishes, Zixuan's Plumbing stock is expected to return 16%. If the economy falls into a recession, the stock's return is

Question 5:

If the economy flourishes, Zixuan's Plumbing stock is expected to return 16%. If the economy falls into a recession, the stock's return is projected at 9%. The probability of a boom is 68% while the probability of a recession is 32%. What is the variance of the returns on this stock?

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