Question

What return measure best allows someone to compare asset returns over different length time periods?

A)Holding Period Return

B)Annualized Returns

C)Net Portfolio Return

Answer 1

Holding Period Return - Return on an asset or portfolio over the whole period during which it was held.

Net Portfolio Return - return experienced by a holder of a portfolio, mainly consists of Dividends and capital appreciation.

Annualized Returns - Average amount of money earned by an investment each year over a given time period.

Since Annualized return provides return for each investment in each year, regardless of the different duration of investments, it is the best comparable return among the three.