The average rate of return on investments in large stocks has outpaced that on investments in Treasury
Question:
The average rate of return on investments in large stocks has outpaced that on investments in Treasury bills by about 8% since 1926. Why, then, does anyone invest in Treasury bills?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 33% (3 reviews)
Despite offering lower returns than largecap stocks over the long term Treasury bills remain an attractive investment option for many individuals and ...View the full answer
Answered By
Joseph Mwaura
I have been teaching college students in various subjects for 9 years now. Besides, I have been tutoring online with several tutoring companies from 2010 to date. The 9 years of experience as a tutor has enabled me to develop multiple tutoring skills and see thousands of students excel in their education and in life after school which gives me much pleasure. I have assisted students in essay writing and in doing academic research and this has helped me be well versed with the various writing styles such as APA, MLA, Chicago/ Turabian, Harvard. I am always ready to handle work at any hour and in any way as students specify. In my tutoring journey, excellence has always been my guiding standard.
4.00+
1+ Reviews
10+ Question Solved
Related Book For
ISE Essentials Of Investments
ISBN: 9781265450090
12th International Edition
Authors: Zvi Bodie, Alex Kane, Alan Marcus
Question Posted:
Students also viewed these Business questions
-
The average rate of return on investments in large stocks has outpaced that on investments in Treasury bills by about 7% since 1926. Why, then, does anyone invest in Treasury bills?
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
In line with the company's global investment strategy, the company has targeted Thailand or Vietnam. The company will be investing RM150 million in the form of equity in the foreign company,...
-
Which statements about try-with-resources are true? (Choose two.) A. Any resource used must implement Closeable. B. If more than one resource is used, then the order in which they are closed is the...
-
The exercise continues Exercise 9.5 in Chapter 9. The following financial statement were reported for a firm for fiscal year 2009 (in millions of dollars): The firm's income tax rate is 35%. The firm...
-
Two identical 9. 60-g metal spheres (small enough to be treated as particles) are hung from separate \(300-\mathrm{mm}\) strings attached to the same nail in a ceiling. Surplus electrons are added to...
-
Explain the distinction between speculative knowledge and practical knowledge.
-
Jennifer Wyatt and Megan Truett formed a partnership, investing $330,000 and $110,000, respectively. Determine their participation in the years net income of $420,000 under each of the following...
-
1. Income taxes vary, not with revenue levels, but with what? Pretax income Indirect costs Expense
-
Go to the website for The Walt Disney Co. (DIS) and download its most recent annual report (its 10-K). Locate the companys Consolidated Balance Sheets and answer these questions: a. How much...
-
What are agency problems? What are some approaches to solving them?
-
The work done by a force is the product of force and distance. The torque due to a force is the product of force and distance. Does this mean that torque and work are equivalent? Explain.
-
From a group of 13 boys and 9 girls, a committee of 5 students is chosen at random. a. The probability that all 5 members on the committee will be girls is (Type an integer or a simplified fraction.)...
-
On December 1, 2020, Cream Ale Ltd. receives $1,800 in advance for an agreement to brew beer during the months of December, January, and February. What is the revenue recognized under accrual...
-
A survey shows that of 100 nurses, 75 play at least soccer, 95 play at least softball, and 50 play both soccer and softball. Is this possible? Step one: Understand the problem and organize the given...
-
The copper coil placed inside a stove with the purpose of heating water that flows through the coil. The coil is made from copper tube with an OD of 1 2 . 7 0 mm and ID of 1 1 . 0 8 mm . Water enters...
-
Confidence Levels Given specific sample data, such as the data given in Exercise 1, which confidence interval is wider: the 95% confidence interval or the 80% confidence interval? Why is it wider?
-
Find v(t) in the following integrodifferential equations using the phasor approach: (a) v(t) + v dt = 10 cost (b) dv / dt + 5v(t) + 4 v dt = 20 sin (4t + 10o)
-
Define deferred revenue. Why is it a liability?
-
What must be the beta of a portfolio with E(r p ) = 18%, if r 1 = 6% and E(r M ) = 14%?
-
Based on current dividend yields and expected growth rates, the expected rates of return on stocks A and B are 11 % and 14 %, respectively. The beta of stock A is .8, while that of stock B is 1.5....
-
If the simple CAPM is valid, which of the following situations are possible? Explain. Consider each situation independently. Portfolio Expected Return Standard Deviation A B 30% 40% 35% 25%
-
Mears Production Company makes several products and sells them for an average price of $70. Mears' accountant is considering two different approaches to estimating the firm's total monthly cost...
-
A fost-growing firm recently paid a dividend of $0.20 per share. The dividend is expected to increase at a 20 percent rate for the next three years. Afterwards, a more stable 11 percent growth rate...
-
What image does it intend to convey? What messages are being communicated to the shareholders? Assess the financial strength of the company and list three audit risk factors you have identified which...
Study smarter with the SolutionInn App