n NISM Certifications
XXI NISM Series XXI-A
Medium

The 'Rule of 72' is used to estimate:

Practice question from NISM XXI A for PMS - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. The number of years to double an investment at a fixed interest rate

    Correct answer

  2. B

    The annual return needed to double an investment in 72 years

  3. C

    The tax on investment gains

  4. D

    The number of months to recover investment costs

Why this is the answer

The Rule of 72 approximates the time required for an investment to double by dividing 72 by the annual rate of return.

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