The fact that historical returns on Treasury bills are less volatile than common stock returns indicates that:
A)the variance of treasury bill returns is zero.
B)the standard deviation of treasury bill returns is negative.
C)the real return on treasury bills has been zero.
D)common stocks should offer a higher return than treasury bills.

Question

Quizplus · Accepted Answer

Treasury bills are considered safer investments with lower volatility compared to common stocks, which are riskier. Therefore, to compensate for the higher risk, common stocks should offer a higher return than treasury bills.

The Fact That Historical Returns on Treasury Bills Are Less