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

Shares of Sundaram Ltd. were bought at Rs 400. During the year the investor received dividends of Rs 12 per share and the price at year-end was Rs 440. What is the total holding period return?

The holding period return is 13%. Capital gain of Rs 40 plus dividend of Rs 12 gives Rs 52 total benefit, which divided by the purchase price of Rs 400 equals 13%.

  1. A10%
  2. B13%Correct
  3. C3%
  4. D12%

Explanation

Capital gain = 440 - 400 = 40. Add dividend 12 to get 52 total. Return = 52/400 = 13%. Option 10% ignores the dividend; 3% counts only the dividend yield; 12% mistakenly adds 10% and 2%.

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