A risk consultant been asked to calculate holding period returns (HPRS) using different compounding assumptions. Specifically,...

  

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A risk consultant been asked to calculate holding period returns (HPRS) using different compounding assumptions. Specifically, she is analyzing a bond investment that has grown from $200 to $500 over the past four years. Assuming that this investment is compounded on a semiannual basis, what is its annual holding period return? A risk consultant been asked to calculate holding period returns (HPRS) using different compounding assumptions. Specifically, she is analyzing a bond investment that has grown from $200 to $500 over the past four years. Assuming that this investment is compounded on a semiannual basis, what is its annual holding period return?

Answer rating: 100% (QA)

We can use two different approaches to calculate the return simple interest and annual compounding S... View the full answer