Question
The rate of return on the common stock of a company is expected to be 13.25% in a boom economy, 8.25% in a normal economy,
The rate of return on the common stock of a company is expected to be 13.25% in a boom economy, 8.25% in a normal economy, and only 2.75% in a recessionary economy. The probabilities of these economic states are 29.0% for a boom, 52.0% for a normal economy, and 19.0% for a recession. What is the variance of the returns on the common stock of the company?
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Handbook Of Alternative Assets
Authors: Mark J. P. Anson
2nd Edition
047198020X, 978-0471980209
