Based on the historical record from 1957 to 2005, which of the following types of Canadian securities earned the SECOND highest return?
A) Long bonds
B) Small stocks
C) Inflation
D) Canadian Treasury bills
E) Common stocks (S&P/TSX Composite)

Question

Quizplus · Accepted Answer

Historically, small stocks have tended to offer the highest returns, followed by common stocks, such as those represented by the S&P/TSX Composite Index in Canada. This pattern reflects the general risk-return trade-off in financial markets, where higher risk investments, like stocks, offer the potential for higher returns compared to lower risk investments like bonds and treasury bills.

Based on the Historical Record from 1957 to 2005, Which