Which one of these is considered to be the safest investment?
A. U.S. Treasury bonds
B. Common stock
C. U.S. Treasury bill
D. Preferred stock
The idea that investors in a common stock may expect a lower total return if they purchase a stock with limited price volatility rather than one with high price volatility suggests 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.