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

question 16

Multiple Choice

You have been given this probability distribution for the holding-period return for a stock: $\begin{array}{lcc} \text { Stock of the Economy } & \text { Probability} & \text {HPR } \\ \text { Boom } &0.40&22\%\\ \text { Normal growth } &0.35&11\%\\\text { Recession }&025&-9\%\end{array}$

What is the expected holding-period return for the stock?

• A) 11.67%
• B) 8.33%
• C) 9.56%
• D) 12.4%
• E) None of the options are correct.

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Definitions:

-noia

A suffix used in psychology to denote types of mental disorders or excessive fears.

Schizophrenic

Relating to schizophrenia, a psychiatric disorder characterized by disruptions in thought processes, perceptions, emotional responsiveness, and social interactions.

Schiz/o

A prefix used in medical terminology referring to split or division, commonly associated with conditions like schizophrenia, indicating a split from reality.

Egocentric

A self-centered approach or thought process, where an individual perceives everything from their own perspective, often neglecting others' views.