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Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985

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BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985
Textbook Problem

Comparing stocks and government bonds, which type of asset has more risk? Which pays a higher average return?

To determine

Risk and return in stock and government bond.

Explanation

Stock is more risky than purchasing a government bond because the value of stock depends upon the future value of the firm. The bond is more secured than a stock because it is issued by government and the investor gets the promised value...

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