The variance of the returns on rt inc. stock, Financial Econometrics

Question

If the economy booms, RTF, Inc. stock is expected to return 10%. If the economy goes into a recessionary period, then RTF is expected to only return 4%. The probability of a boom is 60% while the probability of a recession is 40%. What is the variance of the returns on RTF, Inc. stock?

Posted Date: 2/15/2013 2:59:46 AM | Location : United States







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