Multiple choice

What is holding period?

  1. Holding period is the period in which creditor will take the right on the assets of debtor.

  2. Holding period is the period in which customer will keep default stock before returning it to its supplier.

  3. Holding period is the period in which banker will keep the fund of customer before withdrawing by him.

  4. Holding period is the period in which investor will keep his investment.

  5. All the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Holding period is the period in which investor will keep his investment. Investment may be in stock, debentures or any other assets. Investor can invest his money for short period or long period. So, holding period may also be short period or long period. In a long position, holding period refers to the time between an asset's purchase and its sale. In a short sale, the holding period is the time between when a short seller initially borrows an asset from a brokerage and when he or she sells it back - in other words, the length of time for which the short position is held.

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