Toyota Stock Has the Following Probability Distribution of Expected Prices

question 32

Multiple Choice

Toyota stock has the following probability distribution of expected prices one year from now: $$\begin{array} { l l l } \underline{\text { State }} &\underline{ \text { Probability} } &\underline{ \text { Price }} \\1 & 25 \% & \$ 50 \\2 & 40 \% & \$ 60 \\3 & 35 \% & \$ 70\end{array}$$ If you buy Toyota today for $55 and it will pay a dividend during the year of $4 per share,what is your expected holding-period return on Toyota?

• A)17.72%
• B)18.89%
• C)17.91%
• D)18.18%
• E)None of the above

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