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The Holding Period Yield (HPY) equation helps to compare returns between investments held for different periods of time. HPY is determined on the basis of total returns from the asset or portfolio.
EXAMPLE
An investor bought a stock one year ago at $500 received $50 in dividends over the year. Currently, the stock is trading at $600. What HPR is he expecting?
HPR = [50+ (600 – 500)] / 50 = 0.30 translated to 30%
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