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

question 28

Multiple Choice

You have been given this probability distribution for the holding-period return for a stock: $\begin{array}{lll}\underline{\text { State of the Economy} } &\underline{ \text { Probability} } & \underline{\text { HPR } }\\\text { Boom } & .40 & 22\% \\\text { Normal growth } & .35 & 11\%\\\text { Recession } & .25 & -9 \%\end{array}$

-What is the expected variance for the stock?

• A)142.07%
• B)189.96%
• C)177.04%
• D)128.17%
• E)None of the above

Evaluate the cost-effectiveness of various long-term investment plans based on interest rate assumptions.

Apply discounting methods to estimate the present value of future investment returns.

Assess the potential return on investment for collectibles or antiques considering appreciation and interest rates.

Understand the principles of investment in assets with a finite time of value accrue and decide the rational amount to pay for them.

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