Robert invested in stock and received a positive return over a 9-month period.Which of the following types of returns will be greater?
A)Holding period return (HPR)
B)Effective annual return
C)Annual percentage rate
D)There is not enough information to make a definitive choice.

Question

Quizplus · Accepted Answer

Effective annual return takes into account the compounding effects of the investment, whereas HPR and APR do not. As Robert received positive returns, the compounding effect will increase the effective annual return, making it greater than the other options.

Robert Invested in Stock and Received a Positive Return Over