What conclusion should you draw from the performance of stocks and bonds over the period 1926 to 2015?
A)Bonds have greater volatility than stocks.
B)Stock returns have a lower standard deviation than bond returns.
C)In any year,stocks will outperform bonds.
D)Stock returns have a smaller risk premium than bond returns.
E)Stocks are riskier than bonds.

Question

Quizplus · Accepted Answer

Stocks are generally considered riskier than bonds due to their higher volatility and the greater uncertainty in their returns over time. This is reflected in the historical performance of stocks and bonds from 1926 to 2015, where stocks, despite offering higher potential returns, have shown greater fluctuations in their value compared to bonds.

What Conclusion Should You Draw from the Performance of Stocks