If a stock rose from $10 to $30 over ten years, the
Annual rate of return
A) was 20 percent
B) was greater than 20 percent
C) was less than 20 percent
D) cannot be determined

Question

Quizplus · Accepted Answer

To calculate the annual rate of return, we can use the formula:
[(Ending value/Beginning value)^(1/number of years)] -1

Plugging in the values, we get:
[(30/10)^(1/10)] - 1 = 0.159 or approximately 16%

Therefore, the annual rate of return was 16%, which is less than 20%, so the correct answer is C.

If a Stock Rose from $10 to $30 Over Ten