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The Common Stock of the Dominic Companies Should Return 29

Question 52

Multiple Choice

The common stock of The Dominic Companies should return 29 percent in a boom, 12 percent in a normal economy, and -15 percent in a recession.The probabilities of a boom, normal economy, and recession are 12percent, 86 percent, and 2 percent, respectively.What is the variance of the returns on this stock?


A) .005809
B) .005019
C) .006047
D) .004701
E) .006270

Correct Answer:

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