Which of the following represents the correct ordering ofstandard deviation of r

Question

Which of the following represents the correct ordering ofstandard deviation of returns over the period 1926 to 2000 (fromhighest to lowest standard deviation of returns)?
a. T-bills, long-term corporate bonds, common stocks, Smallfirm common stocks b. small firm common stocks, common stocks, long-termcorporate bonds, T-bills c. T-bills, common stocks, long-term corporate bonds, smallfirm common stocks d. long-term corporate bonds, T-bills, common stocks, smallfirm common stocks Which of the following represents the correct ordering ofstandard deviation of returns over the period 1926 to 2000 (fromhighest to lowest standard deviation of returns)?
a. T-bills, long-term corporate bonds, common stocks, Smallfirm common stocks b. small firm common stocks, common stocks, long-termcorporate bonds, T-bills c. T-bills, common stocks, long-term corporate bonds, smallfirm common stocks d. long-term corporate bonds, T-bills, common stocks, smallfirm common stocks

Explanation / Answer

From highest to lowest standard deviation of returns: b. small firm common stocks, common stocks, long-term corporatebonds, T-bills The returns for small firm common stocks have the more variabilitycompared to large firms or the industry at large.

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