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

Question 42

Multiple Choice

You have been given this probability distribution for the holding-period return for KMP stock:  Stock of the Economy  Probability  HPR  Boom 0.3018% Normal growth 0.5012% Recession 0.20−5%\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 standard deviation for KMP stock?


A) 6.91%
B) 8.13%
C) 7.79%
D) 7.25%
E) 8.85%

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