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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 KMP stock:  State of the Economy ‾ Probability ‾ HPR ‾ Boom .3018% Normal growth .5012% Recession .20−5%\begin{array}{lll}\underline{\text { State of the Economy }} & \underline{\text { Probability }} &\underline{ \text { HPR } }\\\text { Boom } & .30 & 18\% \\\text { Normal growth } & .50 & 12\%\\\text { Recession } & .20 & -5\%\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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