The holding period return on a share is equal to ________.
A)the capital gain yield over the period plus the inflation rate
B)the capital gain yield over the period plus the dividend yield
C)the current yield plus the dividend yield
D)the dividend yield plus the risk premium

Question

Quizplus · Accepted Answer

The holding period return on a share is equal to the sum of the capital gain yield over the holding period and the dividend yield. Option B correctly provides this formula. Option A is incorrect because it includes inflation rate, which is not necessarily relevant for computing holding period returns. Option C is incorrect because current yield is equal to dividend yield divided by the current market price, so including it would be redundant. Option D is incorrect because it introduces the concept of risk premium, which is not a factor in computing holding period returns.

The Holding Period Return on a Share Is Equal to ________