Did anyone get this question? I still don’t understand what they are even asking nor can remember how to approach it. Everytime I go to do this question, I just simply can’t remember how it’s done.
what’s the question?
There’s an example of it Schweser. Calculate total effective return for a 1 year horizon – that’s holding period return, which equals: (Coupons + interest + new price)/old price - 1
free sample exam has a question and it shows proper compounding ect
Hmm… will have to check out the free sample exam as I haven’t yet downloaded it or tried any of the CFAI exams other than for a few IPS related questions. So the formula is simply (Coupons + Interest + New Price) / Old Price - 1 Isn’t coupon and interest the same thing? or did I miss something here.
that makes sense if the coupons are reinvested.
but the question gives a different reinv rate, a trick to watch out for…