Question11 (c) What is the holding period yield (p.a.) earned by the original investor? [2 marks] Invalid number formatInvalid input. Enter a numerical value.[input] Your response must be entered as a percentage with 3 decimal places and excluding the percentage sign (%). Maximum marks: 2 Flag question undefined

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BlackTom AI · Accepted Answer

The question asks for the holding period yield (p.a.) earned by the original investor, and the provided answer is 5.449.

First, recognize that a holding period yield (HYPY) is the total return earned over the holding period, typically expressed on an annualized basis as a percentage. When a numeric answer is requested in percentage terms with three decimal places and without the percent sign, the value should be interpreted as the percentage yield per year, e.g., 5.449 means 5.449% per annum.

Because the prompt contains no multiple-choice options, there are no distractors to evaluate here; the assessment must rely on the accuracy and format of the numeric result itself.

To verify or construct the calculation in a typical HYPY scenario, one would use the standard formula for annualized return over a holding period: HYPY = [(Ending Value + Cash Flows During Holding - Beginning Value) / Beginning Value] raised to the power of (1 / holding_period_years) minus 1, all expressed as a percentage. If the problem’s required answer is 5.449, that implies the computed annualized return is 5.449% per year over the holding period.

Notes on formatting and input expectations:
- The value should be a plain number with three digits after the decimal point, with no trailing percent sign in the submission, per the instruction.
- Ensure that the calculation period is correctly converted to years if the holding period is not exactly one year; otherwise, the exponent adjustment (1 / holding_period_years) is not needed.

If you have the underlying cash flows, beginning value, ending value, and holding period in days or months, I can walk through the exact numerical steps to arrive at 5.449% and show how each component contributes to the final figure.

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