The rate of return on the common stock of a firm is expected to be 14% in a boom economy, 8% in a normal economy, and only 2% in a recessionary economy. The probabilities of these economic states are 30% for a boom, 60% for a normal economy, and 10% for a recession. What is the variance of the returns on the common stock of the firm?

a.0.001296 b.0.001863 c.0.002001 d.0.002471 e.0.001280