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23 September, 21:45

The price of a stock is $55 at the beginning of the year and $50 at the end of the year. if the stock paid a $3 dividend and inflation was 3%, what is the real holding-period return for the year?

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  1. 23 September, 22:06
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    the real holding-period return for the year is - 6.44

    HPR = (50-55+3) / 55 = > - 3.64%

    - must account for π of 3%

    Fisher equation: (1-.0364) = (1+r) (1+.03)

    r = - 6.44%
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