Which one of the following statements is correct based on the historical returns for the period 1926-2009?
A) For the period, 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) For the period, large-company stocks outperformed small-company stocks.

Question

Quizplus · Accepted Answer

The historical returns data for the period 1926-2009 do not support any of the other statements as true. However, it is true that the inflation rate exceeded the rate of return on Treasury bills during some years. This can be seen from the data on inflation and returns during the period.

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