Which one of the following statements is correct based on the historical returns for the period 1926-2018?
A)Treasury bills yielded a higher rate of return than long-term government bonds.
B)The inflation rate exceeded the rate of return on Treasury bills during some years.
C)Small-company stocks outperformed large-company stocks every year during the period.
D)Bond prices, in general, were more volatile than stock prices.
E)Large-company stocks outperformed small-company stocks.

Question

Quizplus · Accepted Answer

Based on the historical returns for the period 1926-2018, option B is correct. There were years where the inflation rate exceeded the rate of return on Treasury bills. The other options are incorrect as Treasury bills did not yield a higher rate of return than long-term government bonds, small-company stocks did not outperform large-company stocks every year, bond prices were not more volatile than stock prices in general, and large-company stocks did not outperform small-company stocks.

Which One of the Following Statements Is Correct Based on the Historical