In Figure 1–4, what has been the highest return investment category over the 79-year period? What has been the lowest? Assuming risk is measured by the standard deviation, what can you say about the relationship of risk to return in Figure 1–4?
Answer to relevant QuestionsWhat are the differences between financial and real assets? How does the Tax Relief Act of 2003 affect the relative attractiveness of long-term capital gains versus dividend income? (A general statement will suffice.) Fastchip is a small technology company with a beta of 1.5 and a market capitalization of $200 million. Currently, long-term government securities are yielding 5.0 percent, intermediate governments are yielding 4.0 percent, ...Explain the difference between a cash account and a margin account. If the Russell 2000 Index is outperforming the Russell 1000 Index, what can you generally assume about the relative performance of smaller versus larger stocks?
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