If the economy booms, RTF, Inc., stock is expected to return 11percent. If the economy goes into a recessionary period, then RTF isexpected to only return 2 percent, The probabilityof a boom is 74percent while the probability of a recession is 26 percent. What is13 the variance of the returns on RTF, Inc., stock?◄OU0.04330.001153C0.000748D 0.001558E 0.039477B

There are different possibilities in the economy and depending on the economy the company can earn…

Answered: only return 2 percent. The probability…

only return 2 percent. The probability of - percent while the probability of a recession is 26 perce 13 the variance of the returns on RTF, Inc., stock? A 0.0433 0.001153 0.000748 D 0.001558

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

If the economy booms, RTF, Inc., stock is expected to return 11
percent. If the economy goes into a recessionary period, then RTF is
expected to only return 2 percent, The probability
of a boom is 74
percent while the probability of a recession is 26 percent. What is
13 the variance of the returns on RTF, Inc., stock?
◄OU
0.0433
0.001153
C
0.000748
D 0.001558
E 0.039477
B

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If the economy booms, RTF, Inc., stock is expected to return 12 percent. If the economy goes into a recessionary period, then RTF is expected to only return 5 percent. The probability of a boom is 79 percent while the probability of a recession is 21 percent. What is the variance of the returns on RTF, Inc., stock? Multiple Choice O O .052650 .000642 .000813 .028512
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