Which of the Following Represents the Correct Ordering of Returns

question 62

Multiple Choice

Which of the following represents the correct ordering of returns over the period 1926 to 2008 (from lowest to highest return) ?

• A) Treasury bills, Long-term corporate bonds, Common stocks, Small firm common stocks
• B) Small firm common stocks, Common stocks, Long-term corporate bonds, Treasury bills
• C) Treasury bills, Common stocks, Long-term corporate bonds, Small firm common stocks
• D) Long-term corporate bonds, Treasury bills, Common stocks, Small firm common stocks

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Definitions:

Money Supply

The entirety of monetary assets present in an economy, such as cash, coins, and balances in checking and saving accounts, at a certain point in time.

Rational Expectations Theory

The hypothesis that individuals form future expectations on the basis of all available information, and thereby consistently predict future conditions accurately.

Rate Of Inflation

The annual percentage increase in the general level of prices for goods and services in an economy.

Business Expectations

The anticipations or outlooks of businesses regarding future economic conditions, which can influence their decisions on investment, hiring, and production.