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    Holding-Period Return for a Single Period

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    Can anyone explain Holding-Period Return for a Single Period?

    HPR = [I + (P0 - P1)] / P0

    Given:

    CR = 8%
    YTM = 8%
    N = 10 years
    Compounding = Semiannual
    P0 = $1000

    In six months the rate falls to 7% what is the HPR?

    I am completely baffled by this one the answer is 10.85% Semiannual. I can not get this to work.

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    Solution Preview

    Can anyone explain Holding-Period Return for a Single Period?

    HPR = [I + (P1 - P0)] / P0 "The correct formula"

    Given:

    CR = 8%
    YTM = 8%
    N = 10 years
    Compounding = Semiannual
    P0 = $1000

    In six months the rate falls to 7% what is the HPR?

    I am ...

    Solution Summary

    This solution is comprised of a detailed explanation to explain Holding-Period Return for a Single Period.

    $2.19

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