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.

---

Definitions:

Aggregate Stock

The total shares or equity held by shareholders in a corporation or the overall supply of goods or commodities available in a market.

Industrial Accident

An unexpected and unplanned event in an industrial setting resulting in injury, illness, or damage.

Labor Market

Refers to the supply and demand for labor, where employees provide the supply and employers the demand.

High-Speed Blenders

Advanced blending machines designed to operate at very high speeds, providing efficient and thorough mixing of ingredients.