You purchased 1,000 shares of Oliver Inc. common stock one year ago for $50 per share.You decided to take your

Question

profit today by selling at $55 per share.What is your holding period return?

Answer 1

Return would be $5 per share ($55 - 50), so the total holding return would be $5 * 1000 shares = $5,000.

Answer 2

It is 10% return because you paid 50,000 and made 5,000 when you sold.

Truthfully though it is not 10% because in real life you would have to subtract the trading cost, taxes, and inflation.