Question: Suppose a stock has three possible outcomes: - A rate of return of 0.2 with probability 0.25. - A rate of return of 0.1 with

Suppose a stock has three possible outcomes: - A rate of

Suppose a stock has three possible outcomes: - A rate of return of 0.2 with probability 0.25. - A rate of return of 0.1 with probability 0.5. - A rate of return of -0.1 with probability 0.25. Find the expected rate of return and the variance. r^bar = R[r] = ____________ and Var(r) = sigma^2 = _______

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