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 holding-period return for KMP stock?

 12.4%

Explanation:

The Expected return for a stock is the summation of all the returns given the probability of all market conditions.

Expected Return = ∑(Probability of return * return)

= (0.30 * 18%) + (0.50 * 12%) + (0.20 * 5%)

= 0.054 + 0.06 + 0.01

= 0.124

= 12.4%

d,

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o