Question

1. Compute the simple holding period returns without the dividend. Compute the arithmetic mean holding period return.

Date Price

1-Jan-17 2,275.32

1-Jan-16 1,918.60

1-Jan-15 2,028.18

1-Jan-14 1,822.36

1-Jan-13 1,480.40

1-Jan-12 1,300.58

1-Jan-11 1,282.62

1-Jan-10 1,123.58

1-Jan-09 865.58

1-Jan-08 1,378.76

1-Jan-07 1,424.16

Answer 1

Holding period return in 07=(1378.76-1424.16)/1424.16=-3.1878%

Holding period return in 08=(865.58-1378.76)/1378.76=-37.2204%

Holding period return in 09=(1123.58-865.58)/865.58=29.8066%

Holding period return in 10=(1282.62-1123.58)/1123.58=14.1548%

Holding period return in 11=(1300.58-1282.62)/1282.62=1.4003%

Holding period return in 12=(1480.40-1300.58)/1300.58=13.8261%

Holding period return in 13=(1822.36-1480.40)/1480.40=23.0992%

Holding period return in 14=(2028.18-1822.36)/1822.36=11.2941%

Holding period return in 15=(1918.60-2028.18)/2028.18=-5.4029%

Holding period return in 16=(2275.32-1918.60)/1918.60=18.5927%

Arithmetic mean holding period return is given by

=-3.1878%-37.2204%+29.8066%+14.1548%+1.4003%+13.8261%+23.0992%+11.2941%-5.4029%+18.5927%)/10

=6.6363%