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The common stock of Chadron Motors should return 2 3 percent in a boom, 1 8 percent in a normal economy, and lose 3 2

The common stock of Chadron Motors should return 23 percent in a boom, 18 percent in a normal
economy, and lose 32 percent in a recession. The probabilities of a boom, normal economy, and
recession are 5 percent, 90 percent, and 5 percent, respectively. What is the variance of the returns
on this stock?
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