The holding period return (HPR)can appropriately be used to
A) compare the yield on investments held for any time period.
B) compare returns among investments that are held for one year or less.
C) isolate realized capital gains.
D) determine the required reinvestment rate for long-term investments.

Question

Quizplus · Accepted Answer

The holding period return (HPR) measures the total return on an investment over a specific period of time, taking into account both capital gains/losses and any income generated, such as dividends or interest. It is most useful for comparing returns among investments that are held for one year or less, as it does not take into account the effect of compounding over longer periods of time. Therefore, choice B is the best answer.

The Holding Period Return (HPR)can Appropriately Be Used to