Which one of the following categories of securities had the highest average return for the period 1926 to 2016?
The question is very specific in nature. Therefore, much details have not been provided.
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Answer is Small Company Stocks.
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Explanation:
Based on the information available for realized returns for the period 1926 to 2016, the average return on small company stocks was around 16.6%. While the average return for large company stocks, U.S. treasury bills, long term corporate bonds and long term government bonds for the same period was around 12%, 3.4%, 6.3% and 6% respectively. Therefore, the highest average return for the period 1926 to 2016 was provided by small company stocks.
Realized Returns (1926 to 2016) | |
Small Company Stocks | 16.6% |
Large Company Stocks | 12% |
Long Term Corporate Bonds | 6.3% |
Long Term Government Bonds | 6% |
U.S. Treasury Bills | 3.4% |
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