Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

CFA Events Calendar

View full calendar

CFA Events Calendar

View full calendar

Recommended Discussions

See how our partners can help you ace your CFA exams.

holding period return confusion

pcunniffpcunniff MilwaukeePosts: 30 Associate

Can someone explain this? I thought the holding period return formula was End Value/Beg Value - 1?


An investor purchased 725 shares of stock at $40 per share and posted initial margin of 60%. He subsequently sold the shares at $50 per share. Based only on this information, the investor's holding period return is closest to:


A)40%.


B)20%.


C)25%.


Explanation

(50 – 40) / (40 × 0.6) = 41.67%.

(Study Session 12, Module 36.2, LOS 36.f)

Comments

Sign In or Register to comment.