Question

Quick question!

Which investment vehicles historically provide the lowest annual rates of return?

A)Government bonds and U.S. Treasury bills
B)Large company stocks and government bonds
C)Small company stocks and large company stocks
D) U.S. Treasury bills and small company stocks

Answer 1

The general rule is this: the lower the risk, the lower the return...and...the higher the risk, the higher the return

Answer 2

So the safer options will return you less money, but they are more guaranteed than the riskier options. If you don't mind being risky, then you can go for the riskier options to hope to earn more money in return. However, keep in mind that the riskier options may have you lose the money invested entirely. Compare this with other safer options where you are guaranteed to get that money back (plus a small bit of interest)

Answer 3

So.. A.

Answer 4

yep, those are the safest options because they are both backed by the government

Answer 5

Thanks!

Answer 6

assuming they do not default, it's the safest option (and not coincidentally the one with the lowest interest rates)

Answer 7

np

Answer 8

Can anyone confirm this answer?