The holding period return (HPR) can appropriately be used to
A) compare the yield on investments held for any time period.
B) compare returns among investments that are held for the same period of time.
C) isolate realized capital gains.
D) determine the required reinvestment rate for long-term investments.

Question

Quizplus · Accepted Answer

The holding period return (HPR) is a measure of the total return on an investment over the period it was held. It is most appropriate for comparing returns among investments that are held for the same period of time, as it does not adjust for the length of the holding period. This makes it less suitable for comparing investments held over different time periods, isolating realized capital gains, or determining reinvestment rates for long-term investments.

The Holding Period Return (HPR) Can Appropriately Be Used to