1.Which one of the following categories of securities had the most volatile annu

Question

1.Which one of the following categories of securities had the most volatile annual returns over the period 1926–2016?

a ,Long-term corporate bonds

b,Large-company stock

c,Intermediate-term government bonds

d,U.S. Treasury bills

e,Small-company stocks

2. Which one of the following statements is correct based on the historical record for the period 1926–2016?

a,The standard deviation of returns for small-company stocks was double that of large-company stocks.

b,U.S. Treasury bills had a zero standard deviation of returns because they are considered to be risk-free.

c,Long-term government bonds had a lower return but a higher standard deviation on average than did long-term corporate bonds.

d,Long-term government bonds had a lower return but a higher standard deviation on average than did long-term corporate bonds.

e,Long-term government bonds were less volatile than intermediate-term government bonds.

Explanation / Answer

1. Which one of the following categories of securities had the most volatile annual returns over the period 1926–2016?
Option e. Small-company stocks

2. Which one of the following statements is correct based on the historical record for the period 1926–2016?
long-term government bonds had a lower return but a higher Standard Deviation on average long-term corporate bonds

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