Critical Formula: Holding Period Return (HPR)

CFA Level I Glossary

Holding period return over one interval is price change plus income, divided by beginning price: HPR = (P1 − P0 + D1) / P0. It answers how much you earned relative to what you started with, including cash distributions. Multi-period problems need chaining or a different averaging method. Forgetting the dividend or coupon term, or using ending price alone, is a frequent error.

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