Which of the Following Classifications of Securities Had the Smallest

question 86

Multiple Choice

Which of the following classifications of securities had the smallest one-year return over the period 1950-1999?

• A)Long-term government bonds
• B)3-month U.S.Treasury bills
• C)Small-company stocks
• D)Large-company stocks

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Definitions:

Option Contract

A contract which grants the buyer the right, but not the obligation, to buy or sell an underlying asset at a set price within a specific time period.

Underlying Asset

The specific financial instrument (e.g., stock, bond, commodity) on which a derivative's value is based.

Puts

A type of option contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a specific time frame.

Strike Price

The fixed price specified in an options contract at which the holder can buy or sell the underlying asset.