Which One of the Following Statements Is Correct Based on the Historical

question 1

Multiple Choice

Which one of the following statements is correct based on the historical record for the period 1926-2010?

• A)The standard deviation of returns for small-company stocks was double that of large-company stocks.
• B)U.S. Treasury bills had a zero standard deviation of returns because they are considered to be risk-free.
• C)Long-term government bonds had a lower return but a higher standard deviation on average than did long-term corporate bonds.
• D)Inflation was less volatile than the returns on U.S. Treasury bills.
• E)Long-term government bonds underperformed intermediate-term government bonds.

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Definitions:

Industry

A classification of businesses that perform similar types of work or produce similar goods and services.

Output

The total amount of goods or services produced by a company or economy.

Marginal Social Cost

Sum of the marginal cost of production and the marginal external cost.

Air Pollutants

Substances in the air that can cause harm to humans and the environment.