Problem

Each of the following statements is dangerous or misleading. Explain why.a. A long-term Un...

Each of the following statements is dangerous or misleading. Explain why.

a. A long-term United States government bond is always absolutely safe.


b. All investors should prefer stocks to bonds because stocks offer higher long-run rates of return.


c. The best practical forecast of future rates of return on the stock market is a 5- or 10-year average of historical returns.

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Solutions For Problems in Chapter 7