The holding period return is calculated as the total return from both price appreciation and dividends received during the holding period.

Calculation:

• Purchase price (P₀) = $12 per share
• Ending price (Pₜ) = $13 per share
• Dividend received (Divₜ) = $0.60 per share

Formula:

$$\text{Holding Period Return} = \frac{P_t - P_0 + \text{Div}_t}{P_0}$$

Substituting values:

$$\text{Holding Period Return} = \frac{13 - 12 + 0.60}{12} = \frac{1.60}{12} = 0.1333 = 13.33\%$$

Key points:

1. The holding period is from January 2 to June 30 (approximately 6 months)
2. Only one quarterly dividend was received on April 1 during this period
3. The return includes both the $1 price appreciation and the $0.60 dividend

Why other options are incorrect:

• 8.33%: This would be the return if only price appreciation was considered ($1/$12 = 8.33%)
• 18.33%: This would result from incorrectly including the dividend twice or using incorrect timing of dividends

The correct answer is 13.33% as it properly accounts for both the capital gain and the dividend income received during the holding period.