What is the variance of the returns on the common stock


The rate of return on the common stock of Flowers by Flo is expected to be 14 percent in a boom economy, 8 percent in a normal economy, and only 2 percent in a recessionary economy. The probabilities of these economic states are 20 percent for a boom, 70 percent for a normal economy, and 10 percent for a recession. What is the variance of the returns on the common stock of Flowers by Flo?

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Accounting Basics: What is the variance of the returns on the common stock
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