If Holding Period return are 25% & period is 2 years then Annualized returns ____.

Name: If Holding Period return are 25% & period is 2 years then Annualized returns ____.
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Quizplus · Accepted Answer

The annualized return is calculated using the formula for compound annual growth rate (CAGR), which is $(1 + HPR)^{\frac{1}{n}} - 1$, where HPR is the holding period return and n is the number of years. Plugging in the given values, $(1 + 0.25)^{\frac{1}{2}} - 1 = 0.1180$ or 11.8%, which is approximately 12.5%.

If Holding Period Return Are 25% & Period Is 2