# Answer to Question #51320 in Finance for mohammed abdu

Question #51320

Fendy purchased 800 shares of Grandsports’ stock at RM3 per share on 1/1/12. He

sold the shares on 12/31/12 for RM3.45. Grandsports’ stock has a beta of 1.9, the

risk-free rate of return is 4%, and the market risk premium is 9%. What is Fendy's

holding period return?

sold the shares on 12/31/12 for RM3.45. Grandsports’ stock has a beta of 1.9, the

risk-free rate of return is 4%, and the market risk premium is 9%. What is Fendy's

holding period return?

Expert's answer

Purchased 800 shares at RM3 per share on 1/1/12. Sold the shares on 12/31/12 for RM3.45. Stock has a beta of 1.9, the risk-free rate of return is 4%, and the market risk premium is 9%.

Holding period return HPR = (End Value - Initial Value) / Initial Value = (3.45 - 3)/3*100% = 15%.

Holding period return HPR = (End Value - Initial Value) / Initial Value = (3.45 - 3)/3*100% = 15%.

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