CFA Practice Question
100 units of a stock is bought on September 15, 20X0 for $1,000 and sold on Dec 15, 20X0 for $990. On Dec 12, 20X0, the stock paid a dividend of $90. The holding period return for the buyer is approximately equal to:
A. -1%
B. 8%
C. 36.05%
Explanation: Holding period return includes all money received (including dividends), and is not annualized if the asset is held for less than a year.
User Contributed Comments 6
| User | Comment |
|---|---|
| cardinal08 | how ? |
| achoi0 | (990-1000+90)/1000 = 0.08 |
| jimmy454 | that is ambiguous, does the stock pay a dividend of $90 per share or $90 for all shares. |
| tijean25 | Jimmy no stock in the world will pay 90 per share less about 25+ percent stock prices are lower than $ 90 per share. That would never happen |
| jjhigdon | $90 dividend on a $10 stock? That would be sweet... |
| mikus | By definition: (P1 - P0 + D1) / P0 |