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The rate of return for a stock is 4% if the state of the economy is recession, 11% if the state of the economy is
The rate of return for a stock is 4% if the state of the economy is recession, 11% if the state of the economy is normal, and 14% if the state of the economy is expansion. The probability for each state of the economy is 25%, 55%, and 20%, respectively. If the stock has an expected rate of return of 9.85%, what is the variance for this stock?
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