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

Question 47

Multiple Choice

You have been given this probability distribution for the holding-period return for a stock:  Stock of the Economy  Probability  HPR  Boom 0.4022% Normal growth 0.3511% Recession 0.25−9%\begin{array} { l c c } \text { Stock of the Economy } & \text { Probability } & \text { HPR } \\\text { Boom } & 0.40 & 22 \% \\\text { Normal growth } & 0.35 & 11 \% \\\text { Recession } & 0.25 & - \quad 9 \% \\\hline\end{array} What is the expected holding-period return for the stock?


A) 11.67%
B) 8.33%
C) 9.56%
D) 12.4%
E) None of the options are correct.

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