Robert invested in stock and received a positive return over a 9-month

Robert invested in stock and received a positive return over a 9-month period. Which of the following types of returns will be greater?

A) Holding period return (HPR)
B) Effective annual return
C) Annual percentage rate
D) There is not enough information to make a definitive choice.

ANSWER

Answer: B
Explanation: B) The holding period return is for only nine months. The other choices are forms of annual returns and will be greater than the HPR if the HPR is positive.