The prices for IMB over the last 3 years are given below. Assuming no dividends were paid,what was the 3-year holding period return? Given the following information: Year 1 return = 10%,Year 2 return = 15%,Year 3 return = 12%.
A) 12.3%
B) 13.9%
C) 15.8%
D) 41.7%
E) 46.5%

Question

Quizplus · Accepted Answer

The 3-year holding period return is calculated by multiplying the returns for each year: (1 + 0.10) * (1 + 0.15) * (1 + 0.12) - 1 = 1.10 * 1.15 * 1.12 - 1 = 1.4178 - 1 = 0.4178 or 41.78%.

The Prices for IMB Over the Last 3 Years Are