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NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Introduction to Securities Markets

An investor buys a share at ₹400, receives a dividend of ₹20 during the year, and sells it at ₹440 at year end. What is the total holding period return?

The total holding period return is 15%. The capital gain is ₹40 (440 minus 400) and the dividend is ₹20, giving a total gain of ₹60 on an investment of ₹400. Dividing 60 by 400 gives 15 percent.

  1. A10%
  2. B5%
  3. C15%Correct
  4. D12.5%

Explanation

Capital gain = 440 - 400 = ₹40. Add dividend of ₹20 to get ₹60 total gain. Return = 60/400 = 15%. Counting only the capital gain gives 10%, which ignores the dividend.

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