If the economy booms, Frank's Welding Supply stock is expected to return 19%. If the economy falls into a recession, the stock's return is projected at 5%. The probability of a boom is 80% while the
Probability of a recession is 20%. What is the variance of the returns on this stock?
A) .003136
B) .006727
C) .009864
D) .010192
E) .013328
Correct Answer:
Verified
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