Learn about Holding Period Returns

HPR= End value of an investment/ Beginning value of an investment

**Q: An investment of 250 units of a currency becomes 300 units of the same currency after a year. **

*HRY= 300/250= 1.2

The annual return is =1.2-1= 0.2 = 20% (0.2*100)

**Quiz:** If you received 300 units after 2 years then what is the holding period of return in percent?

**Annualized HPY= (HPR)^1/n where n is the number of years of investment **

**HPY****= (1.2)^1/2 =( 1.2)^0.5**

**=1.0954 =1.0954-1 * 100**

**=9.54%**

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