CUET Preparation Today
Which of the following is not correct about the Compound Annual Growth Rate (CAGR)? |
It can be used to demonstrate and compare the performance of investment advisors. It can be used to compare the historical returns of stocks with bonds or with a savings account. It can be used to track the performance of various business measures of one or multiple companies alongside one another. It is calculated by taking the arithmetic mean of series of returns. |
It is calculated by taking the arithmetic mean of series of returns. |
The correct answer is Option (4) → It is calculated by taking the arithmetic mean of series of returns. The statement that is NOT correct about CAGR is: It is calculated by taking the arithmetic mean of series of returns. CAGR is calculated using the geometric growth rate, not the arithmetic mean. |
