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?
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%
