The fact that over the long run the return on common stocks has been higher than that on long-term U.S. Treasury bonds is partially explained by the fact that:
A. There are regulations on the interest rates U.S. Treasury bonds can offer.
B. The risk premium is higher on common stocks.
C. A lot more money is invested in common stocks than U.S. Treasury bonds.
D. Risk-averse investors buy more common stock.
Answer: B
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Refer to Figure 4.8. This game will end up with
A) everyone at the beach. B) everyone at the park. C) half of your friends at the beach and half at the park. D) either a or b
According to economic theory, a politician will accept an invitation for another photo opportunity as long as
A) she is paid well. B) he can be sure he will look handsome in the picture. C) the marginal benefit exceeds the marginal cost. D) there are no costs involved.
The graph shown demonstrates a tax a sellers. Before the tax was imposed, the sellers produced ________ units and received __________ for each one sold.
A. 15; $16
B. 31; $9
C. 31; $19
D. 15; $6
When the market basket is tracked over time the goods within the basket:
A. remain the same, so only changing prices are captured. B. reflect the typical consumer each year, so it captures how consumers are affected each year. C. reflect the typical consumer each year, but prices are held constant, so it captures if we are consuming more or less as an economy. D. remain the same, but some prices are held constant on items that are important to consumers.