You have the following expectations about the KMP stock:

STATE OF ECONOMY	PROBABILITY	HOLDING PERIOD RETURN
BOOM	0.34	30%
NORMAL GROWTH	0.54	11%
RECESSION	0.12	-20%

What is the expected holding-period return of a portfolio invested half in KMP stock and half in treasury bills? Treasury bills return 9.5%.

a.

9.50%

b.

13.74%

c.

10.20%

d.

14.02%

e.

16.42%

f.

10.4%

g.

6.87%

h.

11.62%

Clear my choice