Which one of the following categories of securities had the most volatile annual returns over the period 1926-2016?
A) Long-term corporate bonds
B) Large-company stocks
C) Intermediate-term government bonds
D) U.S. Treasury bills
E) Small-company stocks

Question

Quizplus · Accepted Answer

Small-company stocks had the most volatile annual returns over the period 1926-2016, with an average annual return of 17.5% and a standard deviation of 32.9%. This is compared to large-company stocks with an average annual return of 9.8% and a standard deviation of 20.2%. The other options, long-term corporate bonds, intermediate-term government bonds, and U.S. Treasury bills, all had lower volatility than small-company stocks.

Which One of the Following Categories of Securities Had the Most