Answer:
8.33%
Explanation:
Given that
Income = 2
End of period value = 63
Initial value = 62
Recall that,
Holding period return = income + ( end of period value - initial value) ÷ initial value.
Therefore,
HPR = 2 + (63 - 60) ÷ 60
= 2 +( 3) ÷ 60
= 5 ÷ 60
= 0.0833
OR
= 8.33 %
Answer:
The realized return or holding period return on the stock is 8.33%
Explanation:
The realized return on the share is computed with the below formula:
Realized return=(dividends+capital gains)/initial price of the stock
Dividend paid was $2 a share
Capital gains=Selling price-initial purchase price
Capital gains=$63-$60
Capital gains is $3 a share
Realized return=($3+$2)/$60
Realized gain=0.083333333
Realized gain is 8.33%
This represents the entire return on the stock from date of purchase to the date the shares were disposed of.
