The Standard Deviation of Returns of ________

question 29

Multiple Choice

The standard deviation of returns of ________.
I. small stocks is higher than that of large stocks
II. large stocks is lower than that of corporate bonds
III. corporate bonds is higher than that of Treasury bills
Which statement is true?

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

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Definitions:

Salvage Value

The estimated residual value of an asset after its useful life has ended and it can no longer be used for productive purposes.

Depreciable Cost

The total amount of an asset's cost that can be depreciated over its useful life, excluding salvage value.

Double-declining-balance

A method of accelerated depreciation that doubles the normal depreciation rate.

Depreciation Expense

The allocated cost of an asset over its useful life, used to account for declines in value due to use and wear and tear.