Which One of the Following Statements Is Correct Concerning the Historical

question 203

Multiple Choice

Which one of the following statements is correct concerning the historical standard deviations of asset classes over the period 1957-2005?

• A) The standard deviation of small-company stocks is almost three times the average annual return for those stocks.
• B) The standard deviation of large-company stocks demonstrates they have more risk than any other category.
• C) The historical standard deviation of long-term corporate bonds is less than the standard deviation of large-company stocks.
• D) Long-term corporate bonds are more volatile than Canadian Treasury bills as shown by their standard deviations.
• E) The historical standard deviation of large-company stocks is greater than the standard deviation of small-company stocks.

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Definitions:

Richard Henry Pratt

An American army officer best known for founding the Carlisle Indian Industrial School, advocating for the assimilation of Native Americans into European-American culture.

American Culture

A broad conglomerate of customs, traditions, language, arts, history, and social norms prevalent within the United States.

Natural Resources

Raw materials and substances found in the environment that are used by humans for food, energy, materials, and other necessities, such as water, minerals, forests, and fossil fuels.

Commodities

Basic goods used in commerce that are interchangeable with other goods of the same type, such as grains, gold, oil, and natural gas.