The Total Annual Returns on Large Company US Ordinary Shares

question 59

Multiple Choice

The total annual returns on large company US ordinary shares averaged 12.4% from 1926 to 2005 small company shares averaged 17.5%,long-term government bonds averaged 5.8%,while Treasury Bills averaged 3.8%.What was the average risk premium earned by long-term government bonds,and small company shares respectively?

• A)1.8%; 13.3%
• B)2.0%; 13.7%
• C)4.4%; 11.9%
• D)9.5%; 1.8%
• E)None of the above.

---

Definitions:

Good-faith Purchaser

Someone who buys property without knowledge of any existing claims or defects against it, thus acquiring free and clear ownership.

Voidable

Describes a contract or transaction that may appear to be valid but can be legally declared void by one of the parties to the contract for reasons such as fraud or coercion.

Good Title

refers to a legal term meaning ownership of property is legally valid, with no encumbrances or disputes that could question rightful ownership.

CIF

"Cost, Insurance, and Freight," a term used in international shipping agreements where the seller is responsible for the transportation costs, insurance, and freight charges to the designated port.