Answer Happy

The prices are reported at the end of the year, and the
dividends are added up for the entire year.
(a) Calculate the HPR for each of the years in sample. Note that the holding period from the end of 1960 to the end of 1961 is the first one for which you can do the calculation. Recall that the HPR reflects both capital gains and dividend payments. For this calculation assume the dividends are paid out once at the end of the year. (b) What is your best estimate of the expected HPR for next year? (c) What would have been the annualized HPR if you invested at the end of 1960, and sold at the end of 2021? Assume that at the end of each year you reinvest all dividends. (d) What year saw the lowest HPR? What happened? (e) Starting with an investment in the year after the lowest annual return on record, what would have been the return over the subsequent 5 years? Assume again you reinvest all dividends at the end of each year. (f) What is the annualized HPR for the 5-year investment starting after the lowest return year? Ho does it compare to the annualized HPR from the en of 1960 to the end of to 2021 you calculated in part (c)?