Christopher purchased 200 shares of ABC stock at $21.25 per share.After nine months, he sold all of his shares at a price of $19.88 a share.Christopher received a total of $0.55 per share in dividends during the time he owned the shares.Jake's holding period return is
A)-6.4%.
B)-3.9%.
C)2.6%.
D)9.7%.

Question

Quizplus · Accepted Answer

First, we need to calculate the total amount Christopher received from selling his shares: 
Total sale price = 200 shares x $19.88/share = $3976

Next, we need to calculate the total amount Christopher paid to buy the shares: 
Total purchase price = 200 shares x $21.25/share = $4250

We also need to account for the dividends he received: 
Total dividends = 200 shares x $0.55/share = $110

Now, we can calculate Christopher's holding period return:

Holding period return = (total sale price + total dividends - total purchase price) / total purchase price

Holding period return = (($3976 + $110) - $4250) / $4250 = -0.064, or -6.4%

Therefore, the best answer is A, -6.4%.

Christopher Purchased 200 Shares of ABC Stock at $21