Question

c. Which asset was riskiest during the Great​ Depression? How does that fit with your​ intuition? ​ (Select the best choice​ below.) A. The riskiest assets were the corporate bonds. Intuition tells us that company debt should be riskiest. B. The riskiest assets were the stocks in the​ S&P 500. Intuition tells us that large companies should be the riskiest. C. The riskiest assets were the small stocks. Intuition tells us that smaller companies should be riskiest. D. The riskiest assets were the Treasury Bills. Intuition tells us that government securities would be the riskiest.

Answer 1

Answer:

The correct answer to the question is OPTION C (The riskiest assets were the small stocks. Intuition tells us that smaller companies should be riskiest.)

Explanation:

The riskiest assets were the small stocks.

The Great Depression was a term in the 20th century that became synonymous with hardship, suffering due significantly to the failure of the economy in the world with evidence of crash in the stock market.

The riskiest assets were the small stocks because it already crashed as panic made some stop investing and a lot of banks lost money. So small stocks were not lucrative again then, making it a risky asset to have.

Instinct tells us that smaller companies should be the riskiest because investing in smaller companies could be less lucrative due to a fall in the value of shares in tough times as compared to bigger companies.