Which one of the following statements is correct based on the historical record for the period 1926-2010?

Question

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Based on the historical record for the period 1926-2010, long-term government bonds had a lower return but a higher standard deviation on average than did long-term corporate bonds. The other statements are not supported by the historical record. A is incorrect because the standard deviation of returns for small-company stocks was actually higher than double that of large-company stocks. B is incorrect because while U.S. Treasury bills are considered to be risk-free, they still have a small standard deviation of returns. D is incorrect because the returns on U.S. Treasury bills were actually less volatile than inflation. E is incorrect because long-term government bonds outperformed intermediate-term government bonds.

Which One of the Following Statements Is Correct Based on the Historical