Series 79 practice questionmediumIndustry Growth Rate Calculation
An industry grew revenues from $500 million to $605 million over two years. What was the approximate compound annual growth rate (CAGR)?
- A10%✓ Correct answer
- B12%
- C9%
- D8%
Explanation
Why A — 10%
CAGR = [(605/500)^(1/2)] - 1 ≈ 10%. The other answers reflect typical calculation mistakes or confusion between annual and total growth.
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