Which of the following statements is FALSE?
A) On average, larger stocks have higher volatility than smaller stocks.
B) Portfolios of large stocks are typically less volatile than individual large stocks.
C) On average, smaller stocks have higher returns than larger stocks.
D) On average, Treasury Bills have lower returns than corporate bonds.

Question

Quizplus · Accepted Answer

On average, smaller stocks tend to have higher volatility than larger stocks, not the other way around. This is because larger companies usually have more established business models and diversified revenue streams, making their stock prices less susceptible to market fluctuations.

Which of the Following Statements Is FALSE