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If the economy goes into a recessionary period

If the economy goes into a recessionary period

If the economy booms, RTF, Inc. stock is expected to return 10 percent.

If the economy goes into a recessionary period, then RTF is expected to return only 4 percent.

The probability of a boom is 60 percent while the probability of a recession is 40 percent. What is the variance of the returns on RTF, Inc. stock?

Rosa Parks 29-Nov-2017

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