You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table.ProjectBoom (50%)Recession (50%)A$20-$10B-$10$20C$30-$30D$50$50If a manager adopted both project A and B simultaneously, the variance in returns associated with this joint project would be:
A. 10.
B. 500.
C. 30.
D. 0.
Answer: D
Economics
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Economics