Chartered Financial Analyst Level 1

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Answer: 1.0%

**Explanation:** Holding Period Return (HPR) is calculated as: HPR = (Ending Value - Beginning Value + Income) / Beginning Value Where: - Beginning Value = Purchase price = $63.25 - Ending Value = Sale price = $62.80 - Income = Dividends received = $0.54 + $0.54 = $1.08 (two quarterly dividends) **Calculation:** 1. Capital gain/loss = $62.80 - $63.25 = -$0.45 (capital loss) 2. Total income = $1.08 3. Total return = -$0.45 + $1.08 = $0.63 4. HPR = $0.63 / $63.25 = 0.00996 ≈ 0.996% Rounded to one decimal place, this is approximately 1.0%. **Key points:** - The investor receives two dividends: May 1 and August 1 (both within the holding period) - The holding period is from March 24 to September 27 - The capital loss is offset by dividend income, resulting in a positive overall return - The correct answer is A) 1.0%

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An investor buys a stock on March 24 for `$63.25`. The stock pays quarterly dividends of `$0.54` on May 1 and August 1. On September 27, the investor sells the stock for `$62.80`. The investor's holding period return is closest to:

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Last updated: April 1, 2026 at 11:36

1.0%

Chartered Financial Analyst Level 1

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An investor buys a stock on March 24 for $63.25. The stock pays quarterly dividends of $0.54 on May 1 and August 1. On September 27, the investor sells the stock for $62.80. The investor's holding period return is closest to:

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An investor buys a stock on March 24 for `$63.25`. The stock pays quarterly dividends of `$0.54` on May 1 and August 1. On September 27, the investor sells the stock for `$62.80`. The investor's holding period return is closest to: