Since 1960,the Average Annual Return of the Value-Weighted Market Portfolio

question 24

Multiple Choice

Since 1960,the average annual return of the value-weighted market portfolio of U.S.stocks has exceeded that of one-year Treasuries by approximately 5%.In Canada,this number has been about ________.

• A) 20% lower
• B) 10% higher
• C) 20% higher
• D) 10% lower

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Definitions:

Government Securities

Financial instruments issued by the government to finance its expenditures, including bonds, treasury bills, and notes.

Interest Rate Differential

The difference in interest rates between two distinct economic regions or between different types of financial instruments.

Unbiased Forward Rates

Forward exchange rates that are equal to the future spot rates, as predicted by economic theory, free from any speculation or bias.

Spot Exchange Rate

The current market price for exchanging one currency for another for immediate delivery.