Over the Long-Term,which One of the Following Is a Correct

question 18

Multiple Choice

Over the long-term,which one of the following is a correct statement concerning risk premium?

• A)The lower the volatility of returns,the greater the risk premium.
• B)Stocks tend to have a higher risk premium than bonds.
• C)The lower the rate of return,the greater the risk premium.
• D)The risk premium does not affect the rate of return.
• E)The risk premium varies by the same percentage rate as the inflation rate.

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Definitions:

Conscientious

Describing an individual who is diligent, careful, and thorough in their duties or work.

Extravert

A person who is outgoing and thrives in social situations, typically characterized by high levels of sociability and enthusiasm.

Critical Realist

A philosophical stance positing that reality exists independently of human thoughts and beliefs, but our understanding of it is always filtered through our social and personal lenses.

Constructivist

Pertaining to the theory that individuals construct their understanding and knowledge of the world through experiences and reflecting on those experiences.