Question

What does the relationship between HPR and K tell you about the stock’s current value?

Answer 1

Holding period return is the total return received from holding an asset or portfolio of assets over a period of time, generally expressed as a percentage. Holding period return is calculated on the basis of total returns from the asset or portfolio (income plus changes in value). It is particularly useful for comparing returns between investments held for different periods of time.

Holding Period Return = Income + (End of Period Value – Initial Value) / Initial Value