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

question 60

Multiple Choice

You have been given this probability distribution for the holding-period return for GM stock: $$\begin{array} { l c c } \text { Stock of the Economy } & \text { Probability } & \text { HPR } \\\text { Boom } & 0.40 & 30 \% \\\text { Normal growth } & 0.40 & 11 \% \\\text { Recession } & 0.20 & - 10 \% \\\hline\end{array}$$ What is the expected holding-period return for GM stock?

• A) 10.4%
• B) 11.4%
• C) 12.4%
• D) 13.4%
• E) 14.4%

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