Asked by Henry Gardner on Jun 18, 2024
Verified
Based on the historical record from 1957 to 2005, which of the following types of Canadian securities earned the SECOND highest return?
A) Long bonds
B) Small stocks
C) Inflation
D) Canadian Treasury bills
E) Common stocks (S&P/TSX Composite)
Historical Record
Documentation or archives of past events, transactions, or values, often used for reference.
Small Stocks
Shares of companies with relatively small market capitalization.
Canadian Treasury Bills
Short-term government securities issued by the Canadian government, featuring a maturity of less than one year and sold at a discount.
- Recognize the impact of historical earnings information on decisions regarding future investments.
Verified Answer
GZ
Geraldina ZapataJun 23, 2024
Final Answer :
E
Explanation :
Historically, small stocks have tended to offer the highest returns, followed by common stocks, such as those represented by the S&P/TSX Composite Index in Canada. This pattern reflects the general risk-return trade-off in financial markets, where higher risk investments, like stocks, offer the potential for higher returns compared to lower risk investments like bonds and treasury bills.
Learning Objectives
- Recognize the impact of historical earnings information on decisions regarding future investments.
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