How long is the holding period?

Holding period return question (finance)?

• a stock sells for $40 scenarios boom: $2 dividend,$50 stock price normal economy: $1 dividend, 43 stock price recession: .50 dividend, 34 stock price calculate the expected holding period return and standard deviation of the holding period return. all 3 scenarios are equally likely i got for hpr: boom .3, normal .1, recession -.1375 for std i got: .1788 by doing .33 probability multiplied by the hpr, then finding the variance then taking the root can someone double check that work thanks

• Answer:

  B boom return: $12 = 0.30 N normal return: $4 = 0.10 R recession return: ($5.50) = (0.13750) using % return... Expected return: (.3333)(0.3) + (.3333)(0.1) + (.3333)(-0.1375) = 0.08749125 yes, you did this correctly... sum: Probability of scenario * [(return for scenario - E(r))^2] ..for all scenarios; sum is variance 0.031975969, sq rt of var is std dev. 0.178818256