Exhibit 1-8
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
Assume that you hold a two stock portfolio. You are provided with the following information on your holdings. $\begin{array}{|l|l|l|l|}
\hline \text { Stock } & \text { Shares } & \text { Price }(t) & \text { Price }(t+1) \
\hline 1 & 15 & 10 & 12 \
\hline 2 & 25 & 15 & 16 \
\hline
\end{array}$
-Refer to Exhibit 1-8. Calculate the HPY for Stock 1.
A) 10%
B) 20%
C) 15%
D) 12%
E) 7%

Question

Quizplus · Accepted Answer

The Holding Period Yield (HPY) for Stock 1 is calculated as the percentage change in price from time t to time t+1. For Stock 1, the price increases from $10 to $12. The HPY is calculated as $\frac{12 - 10}{10} = \frac{2}{10} = 0.20$ or 20%.

Exhibit 1-8 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

Exhibit 1-8
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)