On Average,for the Period 1926 Through 2009

question 38

Multiple Choice

On average,for the period 1926 through 2009:

• A)the real rate of return on U.S.Treasury bills has been negative.
• B)small company stocks have underperformed large company stocks.
• C)the risk premium on long-term corporate bonds has exceeded the risk premium on long-term government bonds.
• D)long-term government bonds have produced higher returns than long-term corporate bonds.
• E)the risk premium on large company stocks has exceeded the risk premium on small company stocks.

Understand the classifications of corporations and the implications of these classifications on financial accounting.

Comprehend how stock subscriptions are recorded and reported in financial statements.

Grasp the concept of legal capital and its importance in protecting creditors.

Understand the accounting for and financial implications of stock issuance packages.

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Definitions:

Discriminatory Wage Differentials

Variation in wages among workers that arises from factors unrelated to skills or job performance, often based on race, gender, ethnicity, or other non-performance related characteristics.

Customers

Individuals or businesses that purchase goods or services provided by a company or a store.

Market Forces

The supply and demand mechanisms that determine the price and quantity of goods and services in a free market.

Equilibrium Wage

The payment rate at which the labor needed by businesses equals the labor provided by individuals.