Question

Petter Jansen purchased 100 shares each in Sygnette and Joey Stores a year ago. He paid $62.85 and $121.15 per share respectively. He sold Sygnette today for $59.80. He received a dividend fromJoey Stores of $1.60 and alsosold the stock today for $127.35 per share. Petter's return for the portfolio is:'_______

Answer 1

2.58%

Step-by-step explanation:

holding period return (HPR) = [(ending value - initial value) + dividends received] / initial value

• initial value of Petter's portfolio = (100 x $62.85) + (100 x $121.15) = $18,400
• ending value = (100 x $59.80) + (100 x $127.35) = $18,715
• dividends received = 100 x $1.60 = $160

HPR = [($18,715 - $18,400) + $160] / $18,400 = $475 / $18,400 = 0.0258 = 2.58%