If One Were to Rank Different Assets from Highest to Lowest

question 8

Multiple Choice

If one were to rank different assets from highest to lowest the basis of average historical return, the ranking would be:

• A)long-term corporate bonds, large company stocks, long term government bonds, small company stocks, US Treasury bills
• B)small company stocks, large company stocks, long-term corporate bonds, long term government bonds, US Treasury bills
• C)US Treasury bills, long term government bonds, long term corporate bonds, large company stocks, small company stocks
• D)none of the above

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Definitions:

Adjusted Trial Balance

A listing of all the accounts and their balances after adjustments have been made, used to prepare financial statements.

Retained Earnings

The portion of net income that is kept by a company to reinvest in its core business or to pay debt, rather than being distributed to shareholders as dividends.

Revenue Accounts

Accounts that track the income generated from the sale of goods and services, investments, and other sources during the accounting period.

Expense Accounts

Accounts used to track the costs incurred by a business in the course of its operations, not directly tied to the production of goods or services.