The holding period return is the _____ return over the period from purchase to sale divided by the _____.
A)Simple / price of the investment.This response is a distractor.
B)Simple / simple return.This response is a distractor.
C)Total / price of the investment.
D)Total / simple return.This response is a distractor.

Question

Quizplus · Accepted Answer

The holding period return is the total return over the period from purchase to sale divided by the price of the investment. This is because the total return accounts for any changes in value (i.e. capital gains/losses) as well as any income earned from the investment (i.e. dividends or interest). Dividing by the price of the investment gives a percentage return that can be compared across different investments regardless of their initial prices.

The Holding Period Return Is the _____ Return Over the Period