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

Question 40

Multiple Choice

You have been given this probability distribution for the holding-period return for GM stock:  State of the Economy‾ Probability‾ HPR ‾ Boom .4030% Normal growth .4011% Recession .20−10%\begin{array}{lll}\underline{\text { State of the Economy} } &\underline{ \text { Probability} } & \underline{\text { HPR } }\\\text { Boom } & .40 & 30\% \\\text { Normal growth } & .40& 11\%\\\text { Recession } & .20 & -10 \%\end{array}

-What is the expected variance for GM stock?


A) 200.00%
B) 221.04%
C) 246.37%
D) 14.87%
E) 16.13%

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