Question

1. Which one of the followings is not related to Holding Period Return (HPR)?

A. Holding period return (or yield) is the total return earned on an investment during the time that it has been held.

B. A holding period is the amount of time the investment is held by an investor, or the period between the purchase and sale of a security.

C. Holding period return is the average rate of return of a set of values calculated using the products of the terms.

D. Holding period return is useful for making like comparisons between returns on investments purchased at different periods in time.

2. Which one of the followings is not related to Geometric Return or Mean?

A. The longer the time horizon, the more critical compounding becomes and the more appropriate the use of geometric mean.

B. The main benefit of using the geometric mean is the actual amounts invested do not need to be known.

C. The geometric mean is the average rate of return of a set of values calculated using the products of the terms.

D. The geometric mean is the sum of a series of numbers divided by the count of that series of numbers.

3. Unsystematic risk is unique to a specific company or industry. Also known as “nonsystematic risk,” "specific risk," "non-diversifiable risk" or "residual risk," in the context of an investment portfolio, unsystematic risk can be reduced through diversification.

A. True

B. False

4. What is a measure of an investment's systematic risk relative to the overall market?

A. Standard Deviation

B.  Beta

C. Downside Deviation

Answer 1

Answer 1

Following is not related to Holdong Peried Return

C. Holding period return is the average rate of return of a set of values calculated using the products of the terms.

Because Generally Holding period return is calculated by the following formula

HPR% = (Income from the investment during holding period + increase in value of asset during the holding peried)/value in the beggining of holding period X 100

Hence it is not any average rate of return of a set of values calculated using the products of the terms.

Also, reffering to the formula or equation of HPR, Points A, B and D totally relater to holding period return

Hence the answer is C i.e. C is not related to Holding Period return.