Risk and Return We have seen that over long periods, stock investments have tended to substantially outperform
Question:
Risk and Return We have seen that over long periods, stock investments have tended to substantially outperform bond investments. However, it is common to observe investors with long horizons holding entirely bonds. Are such investors irrational?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 70% (20 reviews)
No stocks are riskier Some ...View the full answer
Answered By
Ayush Mishra
I am a certified online tutor, with more than 3 years of experience in online tutoring. My tutoring subjects include: Physics, Mathematics and Mechanical engineering. I have also been awarded as best tutor for year 2019 in my previous organisation. Being a Mechanical Engineer, I love to tell the application of the concepts of science and mathematics in the real world. This help students to develop interest and makes learning fun and easy. This in turn, automatically improves their grades in the subject. I teach students to get prepared for college entry level exam. I also use to teach undergraduate students and guide them through their career aim.
5.00+
2+ Reviews
10+ Question Solved
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th Edition
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
Question Posted:
Students also viewed these Corporate Finance questions
-
We have seen that a long solenoid produces a uniform magnetic field directed along the axis of a cylindrical region. However, to produce a uniform magnetic field directed parallel to a diameter of a...
-
We have seen that the adjacency matrix can be used to represent a graph. However, this method proves to be rather inefficient when there are many 0's (that is, few edges) present. A better method...
-
We have seen that gas prices can fluctuate. But during some periods they have moved consistently. Here are the data extracted for one week of each month from January 2002 to May 2007. The bend in the...
-
Solve exponential equation. Express irrational solutions in exact form and as a decimal rounded to three decimal places. 2 2x + 2 x - 12 = 0
-
FIGURE 8-35 depicts the potential energy of a 350-kg pallet that slides from rest down a frictionless roller conveyer ramp, then moves across a frictionless horizontal conveyer, and finally...
-
A manager at a local restaurant records the number of customers who ordered each of four types of entres. The following table summarizes the results: Entre Type Frequency Beef 25 Fish 17 Chicken .....
-
1.3 Eurocurrencies and Eurocurrency Markets. What are the major eurocurrencies? What is meant by a Eurocurrency market?
-
Outdoor Athletic Equipment Co. operates two divisionsthe Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of...
-
Charlotte Martin is a lawyer. For five years, until June 30, 2022, she was employed by Roadhouse Lid., a national hotel chain. On July 1, 2022, she began to practise law as a sole proprietor from an...
-
Unicom is a regulated utility serving Northern Illinois. The following table lists the stock prices and dividends on Unicom from 1989 to 1998. a. Estimate the average annual return you would have...
-
Investment Selection Given that Majesco Entertainment was down by almost 92 percent for 2005, why did some investors hold the stock? Why didnt they sell out before the price declined so sharply?
-
Market Efficiency Implications Explain why a characteristic of an efficient market is that investments in that market have zero NPVs.
-
Referring to Exercise 6.25, find b such that (a) P[X < b] = .975 (b) P[X > b] = .025 (c) P[X < b] = .305
-
List your educational philosophies?
-
Find the derivative of the function. 6x-7 y= 2x + 1
-
1. A welded butt joint shown is loaded in direct shear with a steady force, F. The weld has full penetration and the weld metal has a yield strength of Sy = 60ksi. (a) Sketch an equivalent load...
-
The probability of rain on any day in the month of April is 2 8 % . The probability that will be windy on any day in the month of April is and the probability of both is 1 5 % . What is the...
-
Assume that over the past 4 years Joe Corp. stock has earned returns of 30%, 2%, 22%, and 10%. Set up the calculations needed to determine the standard deviations of returns on Joe.
-
The element mass matrix in the global coordinate system, \([\bar{m}]\), can be expressed in terms of the element mass matrix in local coordinate system \([\mathrm{m}]\) and the coordinate...
-
(a) Water flows through the nozzle of a garden hose. Find an expression for m in terms of line pressure P 1 , ambient pressure P 2 , inside hose diameter D 1 , and nozzle outlet diameter D 2 . Assume...
-
An investor wrote a 45-strike European call option on an index with three years to expiration. The premium for this option was 4. The investor also bought a 55-strike European call option on the same...
-
Net Income and OCF During 2007, Raines Umbrella Corp. had sales of $840,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $625,000, $120,000, and $130,000,...
-
Accounting Values versus Cash Flows in Problem 19, suppose Raines Umbrella Corp. paid out $30,000 in cash dividends. Is this possible? If spending on net fixed asset and net working capital was zero,...
-
Calculating Cash Flows Brewer industries had the following operating results for 2007: sales = $15,200; cost of goods sold = $11,400; depreciation expense = 2,700; interest expense $520; dividends...
-
Interview Notes Chloe is single, a U.S. citizen, and has a valid Social Security number. No one else lives in the household with her. She turned 50 in 2023. Chloe worked full time. Her total income...
-
All cooperatives except one (has, have) been able to show a profit for participating members. Question 6Select one: a. All cooperatives except one have been able to show a profit for participating...
-
The banks recover their expense and profit by offering to provide a sum of money slightly less than the amount to be repaid is called Question 11 options: annuity discounting interest recoveryThe...
Study smarter with the SolutionInn App