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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
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
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