Jeff Krause's Annualized Holding Period Return Calculation

What was Jeff's annualized HPR on this investment?

Jeff's annualized HPR on this investment is 693%. This means that his investment grew by approximately 693% on an annual basis.

Calculation Process of Jeff Krause's Annualized HPR

Jeff Krause purchased 1,000 shares of a speculative stock in January for $1.96 per share. Six months later, he sold them for $8.75 per share. He uses an online broker that charges him $10.00 per trade. To calculate Jeff's annualized Holding Period Return (HPR), we need to consider the initial investment, the final investment value, and the holding period. First, let's determine Jeff's initial investment. He purchased 1,000 shares at $1.96 per share, so the initial investment is $1.96 * 1000 = $1960. Next, let's find the final investment value. Jeff sold the shares for $8.75 per share, so the final investment value is $8.75 * 1000 = $8750. Now, let's calculate the holding period. Jeff held the shares for 6 months. To calculate the HPR, we use the formula: HPR = (Final Investment Value - Initial Investment) / Initial Investment * (12 / Holding Period) Plugging in the values: HPR = ($8750 - $1960) / $1960 * (12 / 6) HPR = $6790 / $1960 * 2 HPR = 3.464 * 2 HPR = 6.928 To express the HPR as a percentage, we multiply by 100: HPR = 6.928 * 100 HPR = 692.8% Rounding to the nearest whole percent, Jeff's annualized HPR on this investment is 693%. In summary, Jeff's annualized HPR on this investment is 693%. This means that his investment grew by approximately 693% on an annual basis.
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