Which One of the Following Is a Correct Ranking of Securities

question 22

Multiple Choice

Which one of the following is a correct ranking of securities based on their volatility over the period of 1926-2010? Rank from highest to lowest.

• A)large company stocks, U.S. Treasury bills, long-term government bonds
• B)small company stocks, long-term corporate bonds, large company stocks
• C)small company stocks, long-term corporate bonds, intermediate-term government bonds
• D)large company stocks, small company stocks, long-term government bonds
• E)intermediate-term government bonds, long-term corporate bonds, U.S. Treasury bills

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Definitions:

Expense Accounts

Accounts in the general ledger representing the various costs incurred by a company in the course of its operations, excluding product cost.

Accrual Method

An accounting technique that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Reversing Entries

An accounting method used to reverse journal entries, typically at the beginning of a new accounting period, to cancel adjustments made in the previous period.

Revenue Accounts

Accounts that track the income generated by a company from its normal business operations or other activities.