Which of the Following Statements Is True

question 46

Multiple Choice

Which of the following statements is true?

• A) Because expected returns on stocks exceeds expected returns on bonds,stocks should actually outperform bonds in any given year.
• B) Because expected returns on stocks exceeds expected returns on bonds,it is more reasonable to expect that stocks will outperform bonds in any given year.
• C) Expected return is the return one will actually receive.
• D) Both (a)and (c)
• E) All of the above statements are true.

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Definitions:

Additional Paid-In Capital

Represents the amount of money shareholders have invested in a company above the nominal value of the shares.

Exercise

A physical or mental activity performed for the purpose of maintaining health and fitness or a procedure undertaken to achieve a skill through practice.

Non-Interest-Bearing Note

A promissory note or loan agreement that does not accrue interest over its duration.

Present Value

The contemporary valuation of a sum of money to be received in the future or ongoing cash flows, using a specific return rate.