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You purchased a bond 81 days ago for $921.95. You received an interest payment of $32.00 74 days ago. Today the bond’s price is $1,047.64. What is the holding period return (HPR) on the bond as of today?

User Manthan
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1 Answer

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Answer:

HPR on the bond is 17.1%

Step-by-step explanation:

The return received on the asset in the period in which it is held is called holding period return. It included the interest / dividend received and change in the initial price and current price.

According to given data

Interest received = $32.0

Initial Value = $921.95

Today value = 1,047.64

HPR = Income + [ ( End of period value - Initial Value ) / initial value ]

HPR = Interest received + [ ( Today value - Initial Value ) / initial value ]

HPR = [ $32.0 + ( 1047.64 - 921.95 ) / 921.95 ]

HPR = [ $32.0 + ( 1047.64 - 921.95 ) / 921.95 ]

HPR = 157.69 / 921.95

HPR = 0.171

HPR = 17.1%

User Tdrury
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