Historically, Stocks Have Delivered a ________ Return on Average Compared

question 105

Multiple Choice

Historically, stocks have delivered a ________ return on average compared to Treasury bills but have experienced ________ fluctuations in values.

• A) higher, higher
• B) higher, lower
• C) lower, higher
• D) lower, lower

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Definitions:

Equilibrium-Price Relationship

The point at which the supply of a good matches its demand, resulting in a stable market price.

Large Position

Holding a significant quantity of a particular stock, bond, or other financial asset, influencing potential risk and return.

Dominance Argument

A concept in portfolio theory suggesting that if one investment dominates another on all measures of performance, it is the preferable choice.

Risk Premium

The extra return expected by investors for holding a risky asset over a risk-free one, compensating for the higher risk.