Common stocks have offered an annual risk premium in nominal terms, but they have:
A)Also offered the risk premium in real terms
B)Not offered a risk premium in real terms
C)Not offered more than corporate bonds in real terms
D)offered only slightly more than Treasury bonds in real terms

Question

Quizplus · Accepted Answer

Common stocks have historically offered a higher return than inflation, meaning that they have also offered a risk premium in real terms. This is due to the higher risk associated with investing in stocks compared to lower-risk investments like bonds or Treasuries. Despite fluctuations in the market, over the long term, stocks have proven to offer a real risk premium.

Common Stocks Have Offered an Annual Risk Premium in Nominal