Rank the order of returns from highest to lowest for the following classes of U.S.securities for the time period 1926 - 2011.
A)large stocks,small stocks,30-year Treasury bonds,and 90-day T-bills
B)small stocks,large stocks,30-year Treasury bonds,and 90-day T-bills
C)30-year Treasury bonds,large stocks,small stocks,90-day T-bills
D)90 -day T-bills,large stocks,30-year Treasury bonds,small stocks

Question

Quizplus · Accepted Answer

Over the time period of 1926-2011, small stocks have had the highest returns, followed by large stocks, 30-year Treasury bonds, and finally, 90-day T-bills. This is consistent with the general principle that higher risk investments tend to yield higher returns over the long run. Therefore, choice B is the best answer as it correctly ranks the securities in the order of decreasing returns.

Rank the Order of Returns from Highest to Lowest for the Following