You are expecting either a recession or steady growth next year. Recession has a 41% probability of happening. In steady growth, stock ABC returns 10.00% and stock XYZ returns 7.00%. In a recession, stock ABC returns -5.40% and stock XYZ returns -3.20%. You are going to put together a portfolio of these two stocks with positive portfolio weight in each and allocate 39% of the portfolio to ABC with the remainder to XYZ. What is the variance of the portfolio?

Question 15 options:

	0.00353
	0.00362
	0.00371
	0.00380
	0.00389