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

Stocks have a higher rate of return than either U. S. treasury bills or bonds.

C) Small company stocks and large company stocks

Note: Small company stocks generally have a higher rate of return than large company stocks. Small company stocks are a riskier investment because they are more volatile. Stock investments in general are riskier investments than treasury bills or bonds. In general, the possible rate of return increases as the risk of the investment increases.