The probability of a boom is 60 while the probability of a


If the economy booms, RTF, Inc. stock is expected to return 15%. If the economy goes into a recessionary period, then RTF is expected to only return 3%. 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?

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Finance Basics: The probability of a boom is 60 while the probability of a
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