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

question 10

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) 4%
• B) 5%
• C) 6%
• D) 7%

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Definitions:

Inflation Adjusted Risk

Refers to the danger of losing purchasing power of an investment due to inflation outpacing the returns.

Systematic Risk

The inherent risk of exposure to market changes that cannot be diversified away, affecting all securities in a similar manner.

Portfolio Beta

An evaluation of a portfolio's systemic risk in relation to the entire market's volatility.