For the Period 1926-2008, Which One of the Following Had

question 2

Multiple Choice

For the period 1926-2008, which one of the following had the smallest risk premium?

• A) Large-company stocks
• B) Small-company stocks
• C) Long-term corporate bonds
• D) U.S. Treasury bills
• E) Long-term government bonds

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Definitions:

Goodwill

An intangible asset representing the excess of purchase price over the fair market value of identifiable assets and liabilities in a business acquisition.

Fair Value

The amount one would get from selling an asset or would need to spend to settle a liability in a well-organized sale involving market players on the date of evaluation.

Tax Rate

The fraction of earnings on which the government imposes taxes for individuals or corporations.

Consolidation Worksheet Entry

An accounting entry used in the preparation of consolidated financial statements which adjusts for intercompany transactions and balances.