Annualizing the holding period return

Description

In finance, holding period return (HPR) is the total return on an asset or portfolio over the period during which it was held. It is one of the simplest measures of investment performance.

HPR is the percentage by which the value of a portfolio (or asset) has grown for a particular period. It is the sum of income and capital gains divided by the initial period value (asset value at the beginning of the period). To annualize a holding period return is to translate it into percentage per year.

Related formulas

Variables

AHPRAnnualized Holding Period Return (dimensionless)
DtEnd-Of-Period Value ( or face Value) (dimensionless)
Pn1Any Intermediate Gains (dimensionless)
PnInitial Value (dimensionless)
tNumber of years that have passed. (dimensionless)