a stock has had returns of 15 percent, 26 percent, -20 percent and 5 percent over...

a stock has had returns of 15 percent, 26 percent, -20 percent and 5 percent over the last 4 years. what is the holding period return for the stock?

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Expert Solution

Holding Period Return (HPR) = [(1+r1) x (1+r2) x (1+r3) x (1+r4)] – 1

r1, r2, r3, r4 are the return of periods 1st, 2nd, 3rd and 4th respectively

HPR = [(1+0.15) x (1+0.26) x (1-0.20) x (1+0.05)] – 1

= [(1.15) x (1.26) x (0.8) x (1.05)] – 1

= 1.21716 – 1 = 0.21716 or 21.72 %

Holding period return for the stock is 21.72 %

jeff jeffy answered 1 year ago

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