From 1926 to 2005, the Total Annual Returns on Large

question 17

Multiple Choice

From 1926 to 2005, the total annual returns on large company US ordinary shares averaged 12.4%, small company shares averaged 17.5%, long-term government bonds averaged 5.8% and Treasury
Bills averaged 3.8%.What was the average risk premium earned by long-term government bonds
And small company shares respectively during that period of time?

• A)1.8%; 13.3%
• B)2.0%; 13.7%
• C)4.4%; 11.9%
• D)9.5%; 1.8%
• E)None of the above.

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Definitions:

Vestibular Sense

The sensory system responsible for balance and spatial orientation, located in the inner ear.

Clairvoyance

The supposed ability to gain information about an object, person, location, or physical event through means other than the known human senses.

Olfactory Sense

The sense of smell, which detects airborne chemicals and translates them into the perception of odors.

Telepathy

The supposed communication of thoughts or ideas by means other than the known senses.