- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 1. Rates and Returns
- Subject 2. Rates of Return
CFA Practice Question
You buy a stock for $50 and sell it a year later for $60. Your holding period return (Rt) would be closest to ______.
B. 16.67%
C. 20%
A. 1.20
B. 16.67%
C. 20%
Correct Answer: C
60/50 -1 = 0.20
User Contributed Comments 7
| User | Comment |
|---|---|
| gravy | Is this right? I thought it was 60-50+0 / 60 = 16.67% Thanks |
| gravy | Never mind. I see it should be 65-50+0/ 50 = 20% Thanks |
| TopCat | either... =(60/50)-1 or =(60-50+0)/50 |
| studyprep | Dont forget return could be negative or positive. That is ending value could be lower or greater than the starting value. Also, the denominator is a starting value. Also if you are a buyer you might receive dividend D. Add it in the total before the division process. |
| Gooner7 | if you miss this question you may want to consider a different occupation |
| papajeff | Gooner - You are too kind. |
| walterli | (60-50)/50 |