What Has Been the Approximate Average Annual Rate of Return

question 60

Multiple Choice

What has been the approximate average annual rate of return on publicly traded small company stocks since the mid-1920s?

• A) 10%
• B) 16%
• C) 25%
• D) 30%
• E) 40%

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Definitions:

Annual Rate

The interest rate for a period of one year, often expressed as an annual percentage rate.

Compounded Quarterly

This is the procedure of determining interest by adding it to the original investment amount as well as the previously accumulated interest, performed every quarter.

Semi-Annual Period

A six-month time frame or duration, often used in the context of payments, compounding interest, or reporting intervals.

Compounded Monthly

Refers to the calculation of interest added to the principal of a deposit or loan based on a monthly cycle.