If the Variability of the Returns on Large-Company Stocks Were

question 89

Multiple Choice

If the variability of the returns on large-company stocks were to decrease over the long-term, you would expect which one of the following as related to large-company stocks to occur as a result?

• A) Increase in the risk premium
• B) Increase in the average long-term rate of return
• C) Decrease in the 68 percent probability range of returns
• D) Increase in the standard deviation
• E) Increase in the geometric average rate of return