You have been given this probability distribution for the holding-period return for KMP stock: $\begin{array}{lcc}
\text { Stock of the Economy } & \text { Probability} & \text {HPR } \
\text { Boom } &0.30&18\%\
\text { Normal growth } &0.50&12\%\
\text { Recession }&0.20&-5\%
\end{array}$

What is the expected variance for KMP stock?
A) 66.04%
B) 69.96%
C) 77.04%
D) 63.72%
E) 78.45%

Question

You have been given this probability distribution for the holding-period return for KMP stock: $\begin{array}{lcc}
  \text { Stock of the Economy } & \text {  Probability} & \text {HPR  } \
 \text { Boom } &0.30&18\%\
 \text { Normal growth } &0.50&12\%\
\text { Recession }&0.20&-5\%
\end{array}$

What is the expected variance for KMP stock?
A) 66.04%
B) 69.96%
C) 77.04%
D) 63.72%
E) 78.45%

Quizplus · Accepted Answer

The Answer is A

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