Ask Question
4 November, 09:35

During the last two centuries, after adjustment for inflation, a. corporate bonds have yielded an average annual real return of approximately 7 percent, compared to an average real return of about 3 percent for corporate stocks. b. corporate stocks have yielded an average annual real return of approximately 7 percent, compared to an average real return of about 3 percent for bonds. c. both corporate stocks and bonds have yielded an average annual real rate of return of about 3 percent. d. both corporate stocks and bonds have yielded an average annual real rate of return of about 7 percent.

+5
Answers (1)
  1. 4 November, 09:57
    0
    B) corporate stocks have yielded an average annual real return of approximately 7 percent, compared to an average real return of about 3 percent for bonds.

    Explanation:

    Corporate stock prices fluctuate all the time, they increase and decrease sometimes on a daily basis. But on the long run, stock prices generally show an upward tendency. While bonds have a fixed coupon rate and a specific face value.

    Sometimes bonds might be sold with a slightly lower or higher interest rate, but it wouldn't vary that much. The prices of some stock may change a lot over time, e. g. Apple stock was worth around half a dollar in 1985, but its current price is almost $270.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “During the last two centuries, after adjustment for inflation, a. corporate bonds have yielded an average annual real return of ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers