The Histograms of the Returns on Large-Company and Small-Company Stocks

question 22

Multiple Choice

The histograms of the returns on large-company and small-company stocks for the period 1926 to 2015 show that

• A)large-company stocks never lost more than 20 percent in any one year.
• B)1945 was the best-performing year for both large-company and small-company stocks.
• C)small-company stocks most commonly return 30 to 40 percent.
• D)small-company stocks are more volatile than large-company stocks.
• E)large-company stocks are riskier than small-company stocks.

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Definitions:

Demographic Transition Theory

Explains how changes in fertility and mortality affected population growth from preindustrial to postindustrial times.

Preindustrial

Refers to societies or economies that exist before the development of industrialization, characterized by agricultural, handicraft, and manual labor-based systems.

Early Industrial

Referring to the period or stage of development where societies transition from agrarian to industrial economic activities.

Positive Checks

Mechanics that increase mortality rate and decrease population size, as per Thomas Malthus, including famine, war, and disease.