Historical evidence on the returns of large portfolios of shares and bonds shows that investments with higher volatility have rewarded investors with higher returns.

Question

Quizplus · Accepted Answer

This is known as the risk-return tradeoff, where higher risk investments have the potential for higher returns. However, it is important to note that past performance does not guarantee future results, and that investing always carries inherent risks.

Historical Evidence on the Returns of Large Portfolios of Shares