Question

Jack owned a stock for five months and earned an annualized rate of return of 6 percent. What was the holding period return?

Answer 1

Answer: 2.42%

Explanation:

Annualized return = (1 + x) ^12/5 - 1

= .06; x = 1.06 ^5/12 - 1;

x = HPR = 2.42%