Talk:Holding period return
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[edit] Questionable definition
I did a bit of clarifying, but I'm not sure the definition and math are correct. Someone who works with this regularly needs to look at it. -- SueHay 23:13, 1 March 2007 (UTC)
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- See Internal rate of return and rate of return, and think about the mathematics of averaging percentages. That's unreliable math. --SueHay 02:58, 4 April 2007 (UTC)
[edit] Is the calculation about the quarterly return correct?
Is the following correct???
From quarterly holding period returns
To calculate an annual HPR from four quarterly HPRs: If HPR1 through HPR4 are the holding period returns for four consecutive periods, the annual HPR is calculated as follows: 4th root out of(1 + HPR)= (1 + HPR1)(1 + HPR2)(1 + HPR3)(1 + HPR4)
I would have thought since the returns are not annual, but quarterly, the annual return would be the product of the four variables...I am I thinking about this incorrectly?? If the four periods were annual periods, then I would have said the effective annual return is the 4th root of the product of the four variables... —Preceding unsigned comment added by SECulp (talk • contribs) 20:05, 21 September 2007 (UTC)
Sorry, but I forgot to add a variable here...I think the formula for the annual holding period return in this example is as follows:
HPR = [(1+HPR1)*(1+HPR2)*(1+HPR3)*(1*HPR4)] - 1 —Preceding unsigned comment added by SECulp (talk • contribs) 15:23, 24 September 2007 (UTC)
