The Holding-Period Return (HPR) on a Share of Stock Is

question 3

Multiple Choice

The holding-period return (HPR) on a share of stock is equal to

• A) the capital gain yield during the period plus the inflation rate.
• B) the capital gain yield during the period plus the dividend yield.
• C) the current yield plus the dividend yield.
• D) the dividend yield plus the risk premium.
• E) the change in stock price.

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Definitions:

Acid-test Ratio

A stringent indicator that determines whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory.

Current Ratio

A financial ratio indicating a firm's capacity to settle short-term debts due within a year, determined by dividing its current assets by its current liabilities.

Marketable Securities

Financial instruments and assets that are easily liquidable and can be converted into cash quickly at a reasonable price.

Sales on Account

Revenues generated from sales where payment is deferred to a later date.