diff --git a/quantstats/stats.py b/quantstats/stats.py
index 266f9513..1f9aae95 100644
--- a/quantstats/stats.py
+++ b/quantstats/stats.py
@@ -1569,6 +1569,7 @@ def rar(returns, rf=0.0):
     Args:
         returns (pd.Series): Return series to analyze
         rf (float): Risk-free rate (annualized, default: 0.0)
+        compounded (bool): Whether to compound returns for CAGR calculation (default: True)
 
     Returns:
         float: Risk-adjusted return
@@ -1582,7 +1583,7 @@ def rar(returns, rf=0.0):
     returns = _utils._prepare_returns(returns, rf)
 
     # Calculate CAGR and divide by exposure time
-    return cagr(returns) / exposure(returns)
+    return cagr(returns, compounded=compounded) / exposure(returns)
 
 
 def skew(returns, prepare_returns=True):