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Estimate the variance of rate of return

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There is a probability of 0.38 that there will be extremely cold weather this coming Winter. If it does, we expect investors of Star & Bucks to achieve a return of 0.16. Else, investors may expect a lower return of 0.07. Can you estimate the variance of this rate of return? Type your answer as decimal (i.e. 0.052 and not 5.2%). Round your answer to the nearest four decimals if needed.

Reference no: EM133073446

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