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The rate of return on the common stock of a company is expected to be 12.50% in a boom economy, 7.50% in a normal economy,
The rate of return on the common stock of a company is expected to be 12.50% in a boom economy, 7.50% in a normal economy, and only 2.00% in a recessionary economy. The probabilities of these economic states are 26.0% for a boom, 58.0% for a normal economy, and 16.0% for a recession. What is the variance of the returns on the common stock of the company? options: 0.001061 0.001088 0.001116 0.001144 0.001172
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