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Homework answers / question archive / You purchased 250 shares of General Motors stock at a price of $74
You purchased 250 shares of General Motors stock at a price of $74.62 two years ago. You sold all stocks today for $71.31. During this period the stock paid dividends of $5.54 per share. What is your annualized holding period return (annual percentage rate)?
Round the answers to two decimal places in percentage form
Computation of the annualized holding period return:-
Holding period return = (Selling price + Dividends - Buying price) / Buying price
= ((250 * $71.31) + (250 * $5.54) - (250 * $74.62)) / (250 * $74.62)
= ($17,827.50 + $1,385 - $18,655) / $18,655
= $557.50 / $18,655
= 2.99%
Annualized holding period return = (1+HPR)^(1/n)-1
= (1+2.99%)^(1/2) -1
= 1.0148 - 1
= 1.48%
