39. CPA-
An accountant has been retained by a company as an investment advisor for its employees. Research of historical rates of return yields the following information:
Type of Investment Mean Return Standard Deviation
Common stocks 12% 20%
Long-term corporate bonds 6% 8%
Intermediate-term government bonds 5% 5%
U.S. Treasury bills 4% 3%
Which of the following investments has the greatest reward/risk ratio if a return's standard deviation is an accurate assessment of investment risk?
a. Common stocks.
b. Long-term corporate bonds.
c. Intermediate-term government bonds.
d. U.S. Treasury bills. (correct)
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I'm tired of seeing questions not covered by becker.... URGH.