Question: Q.2 i. Define and explain what we mean by the holding period return for an asset. ii. Briefly explain how returns for different time periods

Q.2

i. Define and explain what we mean by the holding period return for an asset.

ii. Briefly explain how returns for different time periods can be made comparable using the EAR (effective annual rate), using a numerical example to illustrate your explanation.

iii. Explain why and how we can adjust nominal returns for changes in the price level, using a numerical example.

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