What Securities Have Offered the Highest Average Annual Returns Over

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Examlex · Accepted Answer

The Answer is The purpose of this question is to check student understanding of the capital market history discussion of the chapter,as well as to reiterate the concept of the risk-return trade-off. The securities categories discussed in the chapter are listed below in descending order of historical returns (and risk):
1. small company stocks
2. large company stocks
3. long-term corporate bonds
4. long-term government bonds
5. U.S. Treasury bills
By learning this hierarchy,and given that they are familiar with the attributes of each security,students should be left with little doubt that the maxim "The greater the risk,the greater the return" is an apt description of financial markets.

What Securities Have Offered the Highest Average Annual Returns Over

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