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On August 15, you purchased 110 shares of stock in the Cara Cotton Company at $26 a share and a year later you sold it for $22 a share. During the year, you received dividends of $2.00 a share. Compute your HPR and HPY on your investment in Cara Cotton. Use a minus sign to enter negative values, if any. Round your answer for HPR to three decimal places. Round your answer for HPY to one decimal place.

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TomShelby

Answer:

HPR 7.692 %

HPY 7.7      %

Explanation:

Holding period return: return in one year

Holding period yield: until maturirty

are the same for this case, as the share was for 1 year only:

returns/ investment = HPR = HPY

return:

dividends         $   2

price variance -$   4

 net return      -$   2

Investment

purchase at $   26

-2/ 26 = -1/13 = -0,0769230 = -7.692%

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