Question11 (c) What is the holding period yield (p.a.) earned by the original investor? [2 marks] 5.352[input] Your response must be entered as a percentage with 3 decimal places and excluding the percentage sign (%). Maximum marks: 2 Flag question undefined简答题
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Question11 (c) What is the holding period yield (p.a.) earned by the original investor? [2 marks] 5.352[input] Your response must be entered as a percentage with 3 decimal places and excluding the percentage sign (%). Maximum marks: 2 Flag question undefined简答题

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BlackTom AI · Accepted Answer

This question asks for the holding period yield (p.a.) earned by the original investor, and the required response format is a numeric percentage with 3 decimal places expressed without the percent sign.

First, recall what holding period yield (HPY) or holding period return (HPR) represents: it measures the total return over the entire period the investment was held, incorporating both income (such as coupon or dividends) and any capital gain or loss, relative to the initial investment. The standard non-annualized HPR is:
- HPR = (Sell price + Cash flows received during the holding period − Buy price) / Buy price

To convert this holding-period return into a holding period yield on an annualized basis (p.a.), you typically use the formula for annualized yield:
- HPY (p.a.) = [ (1 + HPR)^(1 / n) − 1 ] × 100%
where n is the number of years in the holding period.

Key points to ensure correctness:
- Use the exact cash flows received during the holding period (coupons, dividends, etc.).
- Use the purchase price (initial investment) as the base numerator denominator.
- Use the appropriate holding period length to annualize; if the period is not a whole number of years, n should reflect the fractional years (e.g., 0.5 for six months).

Common pitfalls or misconceptions:
- Forgetting to include interim cash flows in the numerator; excluding coupons/dividends will understate the true return.
- Treating HPR as already annualized; the HPR is typically over the full holding period and must be annualized if an annual rate is required.
- Misinterpreting the base: the denominator should be the initial investment (buy price), not the final value unless a different convention is specified.

If you have the actual numbers for the buy price, sell price, and all cash flows received, along with the exact length of the holding period in years, you can plug them into the formulas above to compute the annualized HPY (p.a.). In this particular item, the required format is a numeric value with three decimal places and no percent sign, so ensure to format the final result accordingly (for example, 5.352 means 5.352%).

Question11 (c) What is the holding period yield (p.a.) earned by the original investor? [2 marks] 5.352[input] Your response must be entered as a percentage with 3 decimal places and excluding the percentage sign (%). Maximum marks: 2 Flag question undefined简答题

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Question11 (c) What is the holding period yield (p.a.) earned by the original investor? [2 marks] Invalid input. Enter a numerical value.[input] Your response must be entered as a percentage with 3 decimal places and excluding the percentage sign (%). Maximum marks: 2 Flag question undefined

Question11 (c) What is the holding period yield (p.a.) earned by the original investor? [2 marks] [input] Your response must be entered as a percentage with 3 decimal places and excluding the percentage sign (%). Maximum marks: 2 Flag question undefined

Question11 (c) What is the holding period yield (p.a.) earned by the original investor? [2 marks] [input] Your response must be entered as a percentage with 3 decimal places and excluding the percentage sign (%). Maximum marks: 2 Flag question undefined

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