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NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Investing in Stocks (NISM XXI-A)

An investor bought a share at ₹400, received a dividend of ₹12 during the year, and sold it at ₹440 at year end. What is the total holding period return?

The total holding period return is 13%. The investor earned a capital gain of ₹40 plus a dividend of ₹12, a total of ₹52, which is 13% of the ₹400 purchase price. Ignoring the dividend would give only 10%.

  1. A10%
  2. B3%
  3. C13%Correct
  4. D11%

Explanation

Capital gain = 440 - 400 = ₹40; add dividend ₹12 = ₹52. Return = 52/400 = 13%. The 10% option ignores the dividend, 3% is only the dividend yield, and 11% is a miscalculation.

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