You sold 100 shares of stock today for $30 per share that you paid $20 for 6 years ago. Determine the average annual rate of return on your investment, assuming the stock paid no dividends.
A) 25%
B) 8.33%
C) 150%
D) 7%

Question

Quizplus · Accepted Answer

The average annual rate of return can be calculated using the formula for compound annual growth rate (CAGR): [(Ending Value/Beginning Value)^(1/Number of Years)] - 1. Here, [(30/20)^(1/6)] - 1 = 0.07 or 7%.

You Sold 100 Shares of Stock Today for $30 Per