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 KMP stock: $$\begin{array} { l c r } \text { Stock of the Economy } & \text { Probability } & \text { HPR } \\\text { Boom } & 0.30 & 18 \% \\\text { Normal growth } & 0.50 & 12 \% \\\text { Recession } & 0.20 & - 5 \% \\\hline\end{array}$$ What is the expected holding-period return for KMP stock?

• A) 10.40%
• B) 9.32%
• C) 11.63%
• D) 11.54%
• E) 10.88%

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