- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 1. Rates and Returns
- Subject 2. Rates of Return
CFA Practice Question
An investment of $275 grows to $400 in 3 years. The holding period return is ______.
A. 0.6875
B. 0.455
C. Neither of these answers.
Explanation: The holding period return (HPR) is (400 - 275) / 275 = 0.4545.
User Contributed Comments 8
User | Comment |
---|---|
tengo | other exam questions say the holding period return is the equivalent of 1.455 - which is not given! |
lawrence | tengo: No the HPR should not be annualized. The answer is correct. |
tabulator | Then it should be named HPY (Holding period yield) |
0000 | HPY is a percentage which would be 45.45%. The Holding Period Return is the percentage change in decimal format. Answer is correct. |
Fliper333 | In CFA textbook HPR=(P1-P0+I)/P0. So now the answer 0.455 is correct. |
atemple315 | This was almost too easy and I thought there must be something more involved...luckily my imagination for once was a bit limited and I finally got one of these annoying ones right! |
farhan92 | i got this right in my head and calculations but i selected c o.o |
aha66 | Am I correct if I only divided (400/275)-1 Or does it works only in this case? |