Which of the following offers the highest average return over the long term?
A. |
Treasury bill. |
|
B. |
Long-term corporate bond. |
|
C. |
Small-company stock. |
|
D. |
Certificate of deposit. |
Answer:
Option C: Small Company Stocks
Historically, Investments in the stock market have experienced the greatest return. They have performed better than all other types of financial securities in the long run, but have a tendency to fluctuate from time to time.
Which of the following offers the highest average return over the long term? A. Treasury bill....
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Over the past 88 years, we have observed that investments with the highest average annual returns also tend to have the highest standard deviations of annual returns. This observation supports the notion that there is a positive correlation between risk and return. Which of the following answers correctly ranks investments from highest to lowest risk (and return), where the security with the highest risk is shown first, the one with the lowest risk last? Small-company stocks, long-term corporate bonds, large-company...
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