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Variance of the returns on the common stock

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Reference no: EM132578110

The rate of return on the common stock of a company is expected to be 12.00% in a boom economy, 7.00% in a normal economy, and only 1.50% in a recessionary economy. The probabilities of these economic states are 24.0% for a boom, 62.0% for a normal economy, and 14.0% for a recession. What is the variance of the returns on the common stock of the company?

Reference no: EM132578110

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