The rate of return on the common stock of a company is expected to be 11.50% in a boom economy, 6.50% in a normal economy, and only 1.00% in a recessionary economy. The probabilities of these economic states are 22.0% for a boom, 66.0% for a normal economy, and 12.0% for a recession. What is the variance of the returns on the common stock of the company?

Question 27 options:

a)0.000894

b)0.000916

c)0.000938

d)0.000961

e)0.000983