By diversifying, the risk of holding stock
a. can be eliminated. On average over the past two centuries stocks paid a higher average real return than bonds.
b. can be eliminated. On average over the past two centuries stocks paid a lower average real return than bonds.
c. can be reduced but not eliminated. On average over the past two centuries stocks paid a higher average real return than bonds.
d. can be reduced but not eliminated. On average over the past two centuries stocks paid a lower average real return than bonds.
c
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If the nominal interest rate is 2.9 percent and the rate of inflation is 0.6 percent in a given year, then what is the corresponding real rate of return?
A) 3.5 percent B) 2.3 percent C) -3.5 percent D) None of the above.
A simultaneous increase in both unemployment and inflation is most likely to be the result of a(n):
a. increase in long-run aggregate supply. b. increase in short-run aggregate supply. c. decrease in the aggregate demand. d. simultaneous outward shift of the aggregate demand and supply curves. e. decrease in the short-run aggregate supply.
Taxes drive a wedge into the market by raising the price that sellers receive and lowering the price that buyers pay
a. True b. False Indicate whether the statement is true or false
Using a credit card creates a financial:
A. liability for the person using it and a financial asset for the issuer. B. asset for the person using it and a financial liability for the issuer. C. asset for both the person using it and issuer. D. liability for both the person using it and issuer.