Which Portfolio Had the Highest Average Annual Return in Real

question 12

Multiple Choice

Which portfolio had the highest average annual return in real terms between 1900 and 2011?

• A)Portfolio of U.S.common stocks
• B)Portfolio of U.S.government bonds
• C)Portfolio of Treasury bills
• D)None of the answers

---

Definitions:

Semi-Annually

Pertaining to an event or calculation that occurs twice a year or every six months.

Compounded Monthly

Refers to the process by which the interest earned on an investment is calculated on a monthly basis, with each month's interest being added to the principal for the calculation of subsequent interest.

Compounded Annually

Compounded annually refers to the process where interest is added to the principal sum of a deposit or loan once per year, and future interest is earned on the interest from previous periods as well as the principal.