Which of the Following Statements Are True Based on the Historical

question 89

Multiple Choice

Which of the following statements are true based on the historical record for 1926-2010?
I.Risk and potential reward are inversely related.
II.Risk-free securities produce a positive real rate of return each year.
III.Returns are more predictable over the short-term than they are over the long-term.
IV.Bonds are generally a safer investment than are stocks.

• A)I only
• B)IV only
• C)II and III only
• D)II and IV only
• E)II, III, and IV only

---

Definitions:

Guaranteed Residual Value

An assurance to lessees that the asset being leased will have a specified value at the end of the lease term, affecting lease payments and financial planning.

Maintenance Agreement

A contractual agreement where one party agrees to maintain assets owned by another party, often including repairs and replacements.

Financing Profit

The profit generated from the difference between the cost of financing sources (such as loans) and the income generated from their use.

Inventory Cost

The total cost associated with obtaining, storing, and managing inventory, including purchase costs, storage costs, and any other expenses related to maintaining or handling inventory.