You Have Been Given This Probability Distribution for the Holding-Period

question 53

Multiple Choice

You have been given this probability distribution for the holding-period return for GM stock: What is the expected variance for GM stock?

• A)200.00%
• B)221.04%
• C)246.37%
• D)14.87%

---

Definitions:

Lemon

In the context of markets, a product that is found to be defective only after it has been bought, often used in reference to used cars.

Accord

An agreement, especially one between nations or groups, which outlines the terms and conditions of a mutual understanding or settlement.

Risk-neutral

A condition or attitude where an individual or entity is indifferent to risk when making investment decisions, caring only about the expected outcome without concern for the variability of returns.

Risk-loving

Refers to individuals or entities that prefer or are willing to take more risks, often for the possibility of higher returns.