Question
The rate of return on the common stock of a company is expected to be 15.00% in a boom economy, 10.00% in a normal economy,
The rate of return on the common stock of a company is expected to be 15.00% in a boom economy, 10.00% in a normal economy, and only 4.50% in a recessionary economy. The probabilities of these economic states are 36.0% for a boom, 38.0% for a normal economy, and 26.0% for a recession. What is the variance of the returns on the common stock of the company?
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Horngrens Financial and Managerial Accounting
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
4th Edition
978-0133255584
