14-1) Which of the following represents the correct ordering of standard deviati

Question

14-1) Which of the following represents the correct ordering of standard deviation of returns over the period 1926 to 2005 (from highest to lowest standard deviation of returns)?
a. Treasury bills, Common stocks, Long-term corporate bonds, Small firm common stocks
b. Small firm common stocks, Common stocks, Long-term corporate bonds, Treasury bills
c. Treasury bills, Long-term corporate bonds, Common stocks, Small firm common stocks
d. Treasury bills, Common stocks, Long-term corporate bonds, Small firm common stocks

Explanation / Answer

b. Small firm common stocks, Common stocks, Long-term corporate bonds, Treasury bills Std deviation is highest for common stock as dividends are uncertain. While Treasury stock has least Std Dev as they are assurd

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