n NISM Certifications
XXI NISM Series XXI-A
Medium

The 'CAGR' (Compound Annual Growth Rate) measures:

Practice question from NISM XXI A for PMS - Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. The average annual growth rate over a period, assuming compounding

    Correct answer

  2. B

    The difference between the beginning and ending value

  3. C

    The annual dividend yield

  4. D

    The volatility of returns

Why this is the answer

CAGR smooths out returns over a period to reflect annual growth rate.

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