Historical studies of rates of return on large stocks suggest

Answer

	a.	equity investors rarely sustain losses
	b.	the average return is about 6.4 percent annually
	c.	over a period of years, the rate is approximately 10 percent
	d.	dividends account for over half the return

2) Monetary policy affects securities prices by

1. affecting investors' required return 2. increasing the federal deficit 3. affecting firms' capacity to generate earnings