- CFA Exams
- CFA Level I Exam
- Study Session 15. Fixed Income (2)
- Reading 46. Understanding Fixed-Income Risk and Return
- Subject 7. Interest Rate Risk and the Investment Horizon

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**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

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**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 |