Assume that you expect to hold a $20,000 investment for one year. It
Assume that you expect to hold a $20,000 investment for one year.
It is forecasted to have a year
end value of $21,000 with a 30% probability; a year end value of $24,000 with a 45% probability;
and a year end value of $30,000 with a 25% probability. What is the standard deviation of the
holding period return for this investment?
A) 16.36% B) 14.36% C) 12.06% D) 33.45%
ANSWER
A
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