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Bryan purchased a powerful laptop computer for $2,000. He earned $1,000 mining bitcoins before selling it...

  1. Bryan purchased a powerful laptop computer for $2,000. He earned $1,000 mining bitcoins before selling it a year later for $1,000. What was his holding period return? (Enter the answer in percent, but don't include the "%"

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Answer #1

Holding period return refers to the total return earned from an investment over the holding period. It is the return earned by holding an asset or investment for a particular period of time and is usually expressed as a percentage of the initial investment.

Holding period return = (Income + End value of investment - Initial value of investment ) / Initial value of investment

Another formula to calculate holding period return is,

Holding period return = Investment income + Investment appreciation

Here, Income = 1000, Initial value = 2000, End value = 1000

Holding period return = (1000 + 1000 - 2000) / 2000

= 0

Using the second formula,

Investment income = 1000, Here investment is depreciated by 1000 so investment appreciation = -1000

Holding period return = 1000 + -1000

= 0

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