Hi i have a question If an investor started with $1,000 and four months later ended up with $1,100, what would be their annualized holding period return? A. 1.33 B. 2.10 C. 3.30 D. 1.10 A HPR=1100/1000=1.1 which represents a 4 month total return of 10% that must be annualized. Annualized HPR = HPR1/n=(1.1)1/.333=(1.1)3=1.33 I havent seen this formula above used in the book, i thought the correct formula would be EAY = (1+HPY) * 365/t - 1, any suggestion on how to solve this question
4 month return is 10 percent so the annual return = (1+0.1)^365/t-1=(1+0.1)^12/4-1=1.1^3-1=33.1%