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You Have Studied the Historical Returns and Risks of Various

question 13

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You have studied the historical returns and risks of various securities over the period of 1926-2012.
Describe the historical returns and risks associated with bonds as compared to stocks over that time period.


Definitions:

Coupon Rate

The annual percentage yield of a bond in relation to its face amount.

Yield to Maturity

The expected total yield on a bond when held until it reaches its date of maturity.

Semiannual Coupon

Interest payments made to bondholders twice a year.

Yield

The income return on an investment, such as the interest or dividends received, typically expressed as an annual percentage of the investment cost.

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