CFA Practice Question

There are 266 practice questions for this study session.

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?
You need to log in first to add your comment.