Question

You purchased a share of stock for $12. One year later, you received $0.50 as a dividend and sold the share for $13.25. What was your holding-period return?

Answer 1

The Holding-period return equals 14.58%.

What is the Holding-period return?

This refers to the total return that is earned on an investment during the time that it has been held.

Holding-period return = ($0.50 + $13.25 - $12) / $12

Holding-period return = $1.75 / $12

Holding-period return = 0.145833333

Holding-period return = 14.58%

Therefore, the Holding-period return equals 14.58%.

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