Question11 (c) What is the holding period yield (p.a.) earned by the original investor? [2 marks] 6.729[input] Your response must be entered as a percentage with 3 decimal places and excluding the percentage sign (%). Maximum marks: 2 Flag question undefined

Question

BlackTom AI · Accepted Answer

To determine the holding period yield (HYP) earned by the original investor, you need to understand what HYP represents and the typical way it is calculated.

- Holding period yield is the total return earned over the holding period, usually expressed as an annualized percentage. It incorporates any income received (such as coupons or dividends) plus the capital gain or loss from selling or revaluing the investment, relative to the investment's price at the start of the holding period. 
- The general approach is: HYP (annualized) = [ (Income received during the period) + (Ending price − Beginning price) ] / Beginning price, all adjusted to an annual rate if the holding period is not exactly one year. Then convert this fraction to a percentage by multiplying by 100.

In this specific scenario, the prompt states that the holding period yield (p.a.) earned by the original investor is 6.729, and the answer field expects a percentage entered with three decimal places, omitting the percent sign. Therefore:
- The value 6.729 corresponds to 6.729% per year when expressed as a percentage. 
- When entering the answer, you should provide the numeric portion without the '%' symbol, i.e., 6.729, already formatted to three decimal places as requested.

If you had the supporting figures (beginning price, ending price, and income received), you would follow the steps above to compute the HYP and then verify that the resulting annualized rate matches 6.729%.

Potential sources of error to avoid:
- Do not include the percent sign in the input field; the instruction explicitly asks for a numeric value without '%'.
- Ensure you report exactly three decimal places (e.g., 6.729), even if the rounding would yield otherwise; adjust the calculation to maintain three decimals. 
- Distinguish between holding period yield (over the period) and annualized yield; the prompt specifies annualized (p.a.), so confirm that the calculation has been annualized if the period isn’t one year.

In summary, given the instruction and the provided answer, the correct input is the numeric value 6.729, representing a 6.729% annualized yield, without the percent sign.

Question11 (c) What is the holding period yield (p.a.) earned by the original investor? [2 marks] 6.729[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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