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

Question 16

Multiple Choice

You have been given this probability distribution for the holding-period return for a stock:  Stock of the Economy  ProbabilityHPR  Boom 0.4022% Normal growth 0.3511% Recession 025−9%\begin{array}{lcc} \text { Stock of the Economy } & \text { Probability} & \text {HPR } \\ \text { Boom } &0.40&22\%\\ \text { Normal growth } &0.35&11\%\\\text { Recession }&025&-9\%\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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