Question

Which of these asset classes is more likely to generate the highest returns over​ time?

a. government bonds

b. corporate bonds

c. common stocks

d. preferred stocks

Answer 1

Option 'C' is correct

Common Stock.

Government bonds are considered as low risky asset, so it provides low returns. Where as corporate bonds are little bit riskier than the Government bonds both will receive fixed interest payments. Preferred stocks are riskier than the Government and Corporate bonds but less riskier when compared to common stock, they are entitled to preference dividend.

Common stock is most likely to generate highest returns over time, as these assets are high risky.