On average, for the period 1926 through 2008:
A)the real rate of return on U.S.Treasury bills has been negative.
B)small company stocks have underperformed large company stocks.
C)long-term government bonds have produced higher returns than long-term corporate bonds.
D)the risk premium on long-term corporate bonds has exceeded the risk premium on long-term government bonds.
E)the risk premium on large company stocks has exceeded the risk premium on small company stocks.

Question

Quizplus · Accepted Answer

The risk premium on long-term corporate bonds has historically exceeded the risk premium on long-term government bonds, meaning investors have demanded a higher return for taking on the added risk of investing in corporate bonds over government bonds.

On Average, for the Period 1926 Through 2008