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%