Question

Which of the following statements is​ FALSE?

A. Portfolios of large stocks are typically less volatile than individual large stocks.
B. On​ average, smaller stocks have higher returns than larger stocks.
C. On​ average, larger stocks have higher volatility than smaller stocks.
D. On​ average, Treasury Bills have lower returns than corporate bonds.

Answer 1

The correct answer is C

Step-by-step explanation:

. Larger stocks tend to have lower returns but offer less volatility. That is to say that their price (in relative terms) is more expensive because the greater security they offer, and they resign a greater part of the result.

On the other hand, smaller stocks, since they do not have a consolidated position or lower resources to face changes in the economy, tend to be more volatile, so they offer a greater return