If you look at data from 1926-2007 and calculate the average annual return and s

Question

If you look at data from 1926-2007 and calculate the average annual return and standard deviation of return of these 3 investments: (1) large company stocks, (2) small company stocks, and (3) long-term corporate bonds, the investment with the highest average annual return is _______, and the one with the lowest standard deviation of annual return is _______.

A-large company stocks, small company stocks

B-long-term corporate bonds, large company stocks

C-small company stocks, long-term corporate bonds

D-small company stocks, small company stocks

E-long-term corporate bonds, small company stocks

Explanation / Answer

since small stock company has risky securities therefore It will have higher return.

Also long term corporate bonds are less risky securities than others therefore it will have lowest returns

Therefore Option" C "is correct -Small company stocks , Long term corporate bonds.

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