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Would an investor concerned about market volatility be happier investing in large cap or small cap stocks?  Why

Would an investor concerned about market volatility be happier investing in large cap or small cap stocks?  Why

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Would an investor concerned about market volatility be happier investing in large cap or small cap stocks?  Why?

1961 26.89% 29.51% 1962 -8.73% -16.83% 1963 22.78% 18.67% 1964 16.51% 16.52% 1965 12.45% 34.99% 1966 -10.05% -7.10% 1967 23.99% 63.88% 1968 11.08% 31.82% 1969 -8.49% -22.16% 1970 4.03% -9.87% 1971 14.32% 20.32% 1972 18.98% 5.58% 1973 -14.67% -34.35% 1974 -26.46% -25.87% 1975 37.21% 60.92% 1976 23.85% 50.74% 1977 -7.18% 17.08% 1978 6.57% 16.63% 1979 18.42% 46.26% 1980 32.41% 33.10% 1981 -4.91% 3.05% 1982 21.41% 29.39% 1983 22.51% 28.82% 1984 6.27% -2.24% 1985 32.17% 32.84% 1986 18.47% 8.77% 1987 5.23% -6.89% 1988 16.81% 24.76% 1989 31.49% 19.23% 1990 -3.10% -17.79% 1991 30.47% 48.65% 1992 7.63% 17.38% 1993 10.07% 18.30% 1994 1.32% -1.52% 1995 37.58% 29.48% 1996 22.96% 18.03% 1997 33.36% 28.02% 1998 28.58% 0.52% 1999 21.04% 32.91% 2000 -9.10% -11.03% 2001 -11.89% 13.16% 2002 -22.10% -21.60% 2003 28.69% 51.55% 2004 10.88% 21.01% 2005 4.91% 6.77% 2006 15.80% 16.20% 2007 5.49% 0.02% 2008 -37.00% -37.64% 2009 26.46% 44.14% 2010 15.06% 30.46% 2011 2.11% -3.99% 2012 16.00% 18.18%
Transcribed Image Text:1961 26.89% 29.51% 1962 -8.73% -16.83% 1963 22.78% 18.67% 1964 16.51% 16.52% 1965 12.45% 34.99% 1966 -10.05% -7.10% 1967 23.99% 63.88% 1968 11.08% 31.82% 1969 -8.49% -22.16% 1970 4.03% -9.87% 1971 14.32% 20.32% 1972 18.98% 5.58% 1973 -14.67% -34.35% 1974 -26.46% -25.87% 1975 37.21% 60.92% 1976 23.85% 50.74% 1977 -7.18% 17.08% 1978 6.57% 16.63% 1979 18.42% 46.26% 1980 32.41% 33.10% 1981 -4.91% 3.05% 1982 21.41% 29.39% 1983 22.51% 28.82% 1984 6.27% -2.24% 1985 32.17% 32.84% 1986 18.47% 8.77% 1987 5.23% -6.89% 1988 16.81% 24.76% 1989 31.49% 19.23% 1990 -3.10% -17.79% 1991 30.47% 48.65% 1992 7.63% 17.38% 1993 10.07% 18.30% 1994 1.32% -1.52% 1995 37.58% 29.48% 1996 22.96% 18.03% 1997 33.36% 28.02% 1998 28.58% 0.52% 1999 21.04% 32.91% 2000 -9.10% -11.03% 2001 -11.89% 13.16% 2002 -22.10% -21.60% 2003 28.69% 51.55% 2004 10.88% 21.01% 2005 4.91% 6.77% 2006 15.80% 16.20% 2007 5.49% 0.02% 2008 -37.00% -37.64% 2009 26.46% 44.14% 2010 15.06% 30.46% 2011 2.11% -3.99% 2012 16.00% 18.18%
Date Large Small 1926 11.61% -0.42% 1927 37.48% 29.12% 1928 43.61% 30.57% 1929 -8.41% -39.25% 1930 -24.90% -38.98% 1931 -43.35% -50.40% 1932 -8.20% -0.77% 1933 53.97% 117.52% 1934 -1.43% 19.90% 1935 47.66% 58.60% 1936 33.92% 51.01% 1937 -35.02% -48.74% 1938 31.14% 40.29% 1939 -0.42% 3.60% 1940 -9.78% -5.88% 1941 -11.58% -9.34% 1942 20.33% 27.05% 1943 25.91% 57.28% 1944 19.73% 43.23% 1945 36.41% 64.18% 1946 -8.07% -11.26% 1947 5.70% -2.96% 1948 5.51% -4.13% 1949 18.79% 21.27% 1950 31.74% 36.55% 1951 24.02% 15.47% 1952 18.35% 9.66% 1953 -0.98% -2.90% 1954 52.62% 57.47% 1955 31.54% 20.78% 1956 6.56% 6.53% 1957 -10.79% -17.83% 1958 43.37% 61.86% 1959 11.98% 17.26% 1960 0.46% -3.39% 1961 26.89% 29.51% 1962 -8.73% -16.83% 1963 22.78% 18.67% 1964 16.51% 16.52% 1965 12.45% 34.99% 1966 -10.05% -7.10% 1967 23.99% 63.88% 1968 11.08% 31.82% 1969 -8.49% -22.16% 1970 4.03% -9.87% 1971 14.32% 20.32% 1972 18.98% 5.58% 1973 -14.67% -34.35% 1974 -26.46% -25.87% 1975 37.21% 60.92% 1976 23.85% 50.74% 1977 -7.18% 17.08%
Transcribed Image Text:Date Large Small 1926 11.61% -0.42% 1927 37.48% 29.12% 1928 43.61% 30.57% 1929 -8.41% -39.25% 1930 -24.90% -38.98% 1931 -43.35% -50.40% 1932 -8.20% -0.77% 1933 53.97% 117.52% 1934 -1.43% 19.90% 1935 47.66% 58.60% 1936 33.92% 51.01% 1937 -35.02% -48.74% 1938 31.14% 40.29% 1939 -0.42% 3.60% 1940 -9.78% -5.88% 1941 -11.58% -9.34% 1942 20.33% 27.05% 1943 25.91% 57.28% 1944 19.73% 43.23% 1945 36.41% 64.18% 1946 -8.07% -11.26% 1947 5.70% -2.96% 1948 5.51% -4.13% 1949 18.79% 21.27% 1950 31.74% 36.55% 1951 24.02% 15.47% 1952 18.35% 9.66% 1953 -0.98% -2.90% 1954 52.62% 57.47% 1955 31.54% 20.78% 1956 6.56% 6.53% 1957 -10.79% -17.83% 1958 43.37% 61.86% 1959 11.98% 17.26% 1960 0.46% -3.39% 1961 26.89% 29.51% 1962 -8.73% -16.83% 1963 22.78% 18.67% 1964 16.51% 16.52% 1965 12.45% 34.99% 1966 -10.05% -7.10% 1967 23.99% 63.88% 1968 11.08% 31.82% 1969 -8.49% -22.16% 1970 4.03% -9.87% 1971 14.32% 20.32% 1972 18.98% 5.58% 1973 -14.67% -34.35% 1974 -26.46% -25.87% 1975 37.21% 60.92% 1976 23.85% 50.74% 1977 -7.18% 17.08%
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