Quantitative Methods Q65
0. Information about a common stock investment is given below:
| Date | Amount € | |
| Stock purchase | 15 January 2013 | 62.00 |
| Cash dividend received | 14 July 2013 | 5.00 |
| Stock sale | 15 July 2013 | 78.00 |
The holding period return on the common stock investment is closest to:
- Option : B
- Explanation : Holding period return is calculated as follows: HPR = P1– P0+ D1 / P0 = ending value – beginning value + cash flow beginning value where: P0 = initial investment P1 = price received at the end of the holding period D1 = cash paid by the investment at the end of the holding period HPR = (78 –62 + 5) / 62 = 33.87%. The HPR is not annualized for holding periods shorter than a year.
