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A stock has had returns of 5.05%, 12.11%, 5.83%, 6.14%, and -23.19% over the past five...

A stock has had returns of 5.05%, 12.11%, 5.83%, 6.14%, and -23.19% over the past five years. What was the holding period return for the stock?

-1.61%

-101.61%

-90.87%

-14.84%

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Answer #1

Answer)

Returns are

R1 = 5.05%

R2 = 12.11%

R3 = 5.83%

R4 = 6.14%

R5 = -23.19%

Holding Period Return is given by following formula

HPR = [ (1+R1) * (1+R2) * (1+R3) * (1+R4) * (1+R5) ] - 1

Putting in values

HPR = [ (1+ 0.0505) * (1+ 0.1211) * (1+ 0.0583) * (1+ 0.0614) * (1 - 0.2319) ] - 1

HPR = 1.016122 - 1 = 0.016122

HPR = 1.6122%

Please ask in case of any doubt

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