When ranking security returns, the data shows that the annualized returns are as follows (ranked from highest return to lowest return):
A)Large stocks, small stocks, long-term corporate bonds, long-term government bonds, treasury bills.
B)Small stocks, large stocks, long-term corporate bonds, long-term government bonds, treasury bills.
C)Small stocks, large stocks, treasury bills, long-term government bonds, long-term corporate bonds.
D)Treasury bills, long-term government bonds, long-term corporate bonds, large stocks, small stocks.
E)Large stocks, small stocks, long-term government bonds, long-term corporate bonds, treasury bills.

Question

Quizplus · Accepted Answer

According to the data, small stocks provide the highest annualized returns, followed by large stocks. Long-term corporate bonds, long-term government bonds, and treasury bills provide progressively lower returns. Therefore, choice B, which ranks small stocks higher than large stocks and ranks bonds and treasury bills in order of decreasing returns, is the best choice.

When Ranking Security Returns, the Data Shows That the Annualized