You have been given this probability distribution for the holding-period return for KMP stock: HPR 18% 12% 5% Stock of the Economy Вoom Probability 0.30 0.50 Normal growth Recession 0.20 What is the expected holding-period return for KMP stock? What is the expected standard deviation for KMP stock? 10.40%; 8.13% 9.32%; 6.91% O 11. 63%.7 25%

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter7: Valuation Of Stocks And Corporations
Section7.4: Valuing Common Stocks
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You have been given this probability distribution for the holding-period return for KMP stock:
Stock of the Economy
Вoom
Probability
0.30
0.50
HPR
18%
Normal growth
Recession
12%
0.20
- 5%
What is the expected holding-period return for KMP stock? What is the expected standard deviation
for KMP stock?
10.40%; 8.13%
9.32%; 6.91%
11.63%; 7.25%
None of the options are correct
Transcribed Image Text:You have been given this probability distribution for the holding-period return for KMP stock: Stock of the Economy Вoom Probability 0.30 0.50 HPR 18% Normal growth Recession 12% 0.20 - 5% What is the expected holding-period return for KMP stock? What is the expected standard deviation for KMP stock? 10.40%; 8.13% 9.32%; 6.91% 11.63%; 7.25% None of the options are correct
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