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Which of the Following Statements Best Describes the Relationship Between

Question 40

Multiple Choice

Which of the following statements best describes the relationship between stocks and bonds with respect to risk and return?


A) Although bonds are riskier than stocks, bonds have historically earned a higher rate of return.
B) Even though there is a higher expected rate of return with bond ownership relative to stock ownership, there is no guarantee that a higher return will be realized by any given instrument or investor.
C) Although stocks are riskier than bonds, bonds have historically earned a higher rate of return.
D) Other things equal, ownership of stocks involves greater risk and greater expected return than ownership of bonds or other financial assets.

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