Which of the Following Investments Has the Best Rate of Return

question 68

Multiple Choice

Which of the following investments has the best rate of return when adjusted for inflation?

• A)savings accounts
• B)corporate bonds
• C)Canadian treasury bills
• D)common stocks
• E)preferred stocks

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Definitions:

Efficient Frontier

A set of optimal portfolios offering the highest expected return for a defined level of risk or the lowest risk for a given level of expected return.

Human Capital

The economic value of an individual’s skills, knowledge, and experience, considered in the context of their ability to contribute to an economy.

Arbitrage Opportunity

The opportunity to buy an asset at a lower price in one market and sell it at a higher price in another, securing a risk-free profit.

Short Position

A trading strategy involving the sale of a security that is not owned by the seller, with the expectation that the price will decline, allowing it to be bought back at a lower price.