Please explain the Holding Period Return (HPR) in CFA Level 1 in plain and simple language, with concise and intuitive visuals. Center and enlarge the content, add some animation effects to fill the screen completely without leaving too much blank space. Highlight key points with bright colors, ensure no typographical overlaps in the content, and maintain a complete structure (from the definition of the knowledge point to the summary, with intermediate content progressing step by step).

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Welcome to Holding Period Return, or HPR! This is a fundamental concept in CFA Level 1. HPR measures the total return you earn from an investment during the exact period you hold it. It includes both price changes and any income you receive, like dividends or interest. Think of it as your complete profit or loss from start to finish. Now let's learn how to calculate HPR. The formula is simple: HPR equals ending value minus beginning value plus income, all divided by beginning value. Think of it as what you got back minus what you put in, divided by what you put in. Your total return comes from two sources: price change, which is the difference between ending and beginning value, and income, which includes dividends, interest, or any cash you received while holding the investment. Let's work through a simple example. You buy a stock for one hundred dollars. After one year, it's worth one hundred ten dollars, and you received a two dollar dividend. First, identify your values: beginning value is one hundred, ending value is one hundred ten, and income is two dollars. Apply the formula: HPR equals one hundred ten minus one hundred plus two, all divided by one hundred. Calculate: twelve divided by one hundred equals zero point one two, or twelve percent. Your investment returned twelve percent over the holding period! Why is HPR so important? HPR gives you the true total return for your specific holding period. Unlike simple price change calculations, HPR includes both capital gains and income, providing a complete picture of your investment performance. It's a fundamental tool in CFA Level 1 and essential for comparing different investment opportunities. While other measures might only show price changes, HPR captures everything you earned, making it the gold standard for measuring investment returns. Let's summarize what we've learned about Holding Period Return. HPR measures total return over a specific period, including both price changes and income. The formula is simple: ending value minus starting value plus income, all divided by starting value. This is an essential concept for CFA Level 1 that gives you the complete picture of investment performance. Remember this formula and you'll have a powerful tool for analyzing any investment. Keep it simple, keep it clear, and you'll master HPR!