What Conclusion Should You Draw from the Performance of Stocks

question 64

Multiple Choice

What conclusion should you draw from the performance of stocks and bonds over the period 1926 to 2015?

• A)Bonds have greater volatility than stocks.
• B)Stock returns have a lower standard deviation than bond returns.
• C)In any year,stocks will outperform bonds.
• D)Stock returns have a smaller risk premium than bond returns.
• E)Stocks are riskier than bonds.

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Definitions:

International Trade

The exchange of goods and services between countries, allowing economies to grow by specializing in the production of goods they can produce most efficiently.

Quantity Demanded

The total amount of a good or service that consumers are willing to buy at a given price level in a given period.

World Price

The global market price of a commodity, determined by worldwide supply and demand.

Quantity Supplied

How much of a certain good or service suppliers are ready and able to make available for purchase at a specific price point.