Which One of the Following Categories of Securities Has the Highest

question 184

Multiple Choice

Which one of the following categories of securities has the highest average risk premium?

• A) Treasury bills
• B) long-term bonds
• C) small-company stocks
• D) U.S. common stocks
• E) Canadian common stocks

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Definitions:

Long Run

A period in economics in which all factors of production and costs are variable, and firms can adjust all inputs.

Nuclear Power Plants

Facilities that use nuclear fission to generate electricity, typically by heating water to produce steam that turns turbines.

Average Total Cost Curve

A graph that shows the average total cost of producing different quantities of output, typically U-shaped, reflecting economies and diseconomies of scale.

Average Variable Cost Curve

The Average Variable Cost Curve graphically represents how a firm's variable costs (costs that change with the level of output) per unit of output change as the firm alters its level of production.