Which one of these is the safest investment?

	A.	Corporate bonds
	B.	Common stocks
	C.	US Treasury bills
	D.	Preferred stock

The idea that investors on average have earned a higher return from common stocks than from Treasury bills supports the view that:

	A.	investors are irrational.
	B.	there is a relationship between risk and return.
	C.	real rates of return will be lower during periods of price stability.
	D.	stocks should be avoided when inflation is low.

The wider the dispersion of returns on a stock, the:

	A.	lower the expected rate of return.
	B.	higher the standard deviation.
	C.	lower the real rate of return.
	D.	lower the variance.