You have been given this probability distribution for the holding-period return for KMP stock:

Stock of the Economy Probability HPR

Boom 0.30 18 %

Normal growth 0.50 12 %

Recession 0.20 5 %

What is the expected variance for KMP stock?

Toyota stock has the following probability distribution of expected prices one year from now:

State Probability Price

1 25 % $ 50

2 40 % $ 60

3 35 % $ 70

If you buy Toyota today for $55 and it will pay a dividend during the year of $4 per share, what is your expected holding-period return on Toyota?