2. Which one of the following statements is correct based on the historical record for the period 19262016?

• The standard deviation of returns for small-company stocks was double that of large-company stocks.

• U.S. Treasury bills had a zero standard deviation of returns because they are considered to be risk-free.

• Long-term government bonds had a lower return but a higher standard deviation on average than did long-term corporate bonds.

• Inflation was less volatile than the returns on U.S. Treasury bills.

• Long-term government bonds were less volatile than intermediate-term government bonds.