The holding period return on a stock 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 stock is made up of two components: the capital gain yield and the dividend yield. The capital gain yield is the change in the price of the stock over the holding period, and the dividend yield is the cash flow generated by the stock in the form of dividends. Therefore, the correct answer is B, as it adds both components.

The Holding Period Return on a Stock Is Equal to ________