The holding period return (HPR) of one's portfolio should be compared to investment goals
I. to determine whether the rate of return is commensurate with the risk involved.
II. to be sure one's portfolio is outperforming the S&P 500 Index.
III. to isolate any problem investments.
IV. to determine when to change benchmarks from the S&P 500 to the NASDAQ Composite Index.
A) I and III only
B) II and IV only
C) I, II and III only
D) II, III and IV only

Question

Quizplus · Accepted Answer

The holding period return (HPR) of a portfolio is compared to investment goals primarily to determine if the return is appropriate for the risk taken (I) and to identify any investments that are underperforming or problematic (III). Comparing to the S&P 500 or changing benchmarks may be part of broader investment strategy considerations but are not directly related to assessing the HPR against investment goals.

The Holding Period Return (HPR) of One's Portfolio Should Be