Over the period 1925-2012,stocks outperformed bonds by a wide margin.What conclusion should you draw from this performance?
A)Stocks will have a higher rate of return than bonds in any given year.
B)Investors should only purchase stocks.
C)Any stock you select will outperform a bond over the long-term.
D)On an annual basis,stock returns will exceed the rate of inflation but bond returns may or may not.
E)Stocks are riskier than bonds.

Question

Quizplus · Accepted Answer

Stocks are generally riskier than bonds, which is why they have the potential for higher returns over the long term. However, this does not guarantee that stocks will outperform bonds in any given year or that any specific stock will outperform a bond.

Over the Period 1925-2012,stocks Outperformed Bonds by a Wide Margin