You have been given this probability distribution for the holding-period return for a stock: $\begin{array}{lcc}\text{ Stock of the Economy }& \text{ Probability}& \text{HPR }\\ \text{ Boom }& 0.40& 22\%\\ \text{ Normal growth }& 0.35& 11\%\\ \text{ Recession }& 025& -9\%\end{array}$

What is the expected holding-period return for the stock?

A) 11.67%
B) 8.33%
C) 9.56%
D) 12.4%
E) None of the options are correct.

Expected Holding-Period Return

The total return anticipated on a bond if it is held until the end of its lifetime or holding period, including interest payments and capital gain or loss.

Probability Distribution

An analytical function that describes every probable value and its likelihood for a random variable over a predefined interval.

Stock of the Economy

The stock of the economy refers to the total value of all assets and investments available within an economy at a given time.