A Study Examining the Performance of Numerous Assets from the United

question 12

Multiple Choice

A study examining the performance of numerous assets from the United States and around the world confirms that

• A) riskier assets with higher standard deviations experienced lower returns.
• B) riskier assets with higher standard deviations experienced higher returns.
• C) standard deviation did a better job of explaining the returns than beta.
• D) U.S. equities are highly correlated with world government bonds and with the commodities index.
• E) most assets (including common stocks) have positive correlations with inflation.

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Definitions:

Top Marginal Tax Rate

The highest tax rate applied to the last dollar of taxable income, affecting the highest income earners within a progressive tax system.

1980

A year marked by significant global events including the eruption of Mount St. Helens and the election of Ronald Reagan as the President of the United States.

Government Ownership

The possession and control over enterprises and assets by the state or government, rather than private individuals or organizations.

Federal Government

The federal government refers to the national government of a country that is responsible for enacting and enforcing laws, collecting taxes, and managing the country’s affairs.