Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The common stock of The Dominic Companies should return 29 percent in a boom, 12 percent in a normal economy, and 15 percent in a
The common stock of The Dominic Companies should return 29 percent in a boom, 12 percent in a normal economy, and 15 percent in a recession. The probabilities of a boom, normal economy, and recession are 12 percent, 86 percent, and 2 percent, respectively. What is the variance of the returns on this stock?
-
.005809
-
.005019
-
.006047
-
.004701
-
.006270
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