CUET Preparation Today
Which of the following is NOT correct? |
Nominal rate of return is the total amount of money earned by an investment without considering various expenses. The compound annual growth rate is calculated by the final and beginning value of the investment. The compound annual growth rate describes the effect of compounding. The actual rate of return can be calculated by adding the various expenses into the total money earned. |
The actual rate of return can be calculated by adding the various expenses into the total money earned. |
The correct answer is Option (4) → The actual rate of return can be calculated by adding the various expenses into the total money earned. ☀ Nominal rate of return: total money earned without considering expenses → Correct ☀ CAGR: calculated from final and beginning value → Correct ☀ CAGR describes effect of compounding → Correct ☀ Actual rate of return can be calculated by adding expenses into total money earned → Incorrect, it should account for **deducting** expenses, not adding |
