Multiple choice1 / 15
Question 1
An equity analyst models a stock's one-period return under three economic states: with probability , with probability , and with probability . The stock's variance of return is closest to:
An equity analyst models a stock's one-period return under three economic states: 18 with probability 0.25, 6 with probability 0.50, and −10 with probability 0.25. The stock's variance of return is closest to: