What is the holding period return to an investor who bought 100 shares of Oil Slick stock nine months ago for $36 per share, received two $50 dividend checks, and sold the stock today at $38 a share (round % to 2 decimals)?

Question

Quizplus · Accepted Answer

First, let's calculate the total amount of dividends received: 
$50 per dividend x 2 dividends = $100

Now, let's calculate the total proceeds from selling the stock: 
100 shares x $38 per share = $3,800

The initial investment was: 
100 shares x $36 per share = $3,600

The total return is: 
($3,800 + $100 - $3,600) / $3,600 = 0.0833 or 8.33%

Therefore, the holding period return is 8.33%, which is closest to option B.

What Is the Holding Period Return to an Investor Who