This chapter presented returns for a number of different asset classes. The general conclusion is that stocks have outperformed bonds over most of the 20th century, though stocks have also exhibited more risk.
The statistical measures in this chapter are necessary building blocks for the material of the next three chapters. In particular, standard deviation and variance measure the variability of the return on an individual security and on portfolios of securities. In the next chapter, we will argue that standard deviation and variance are appropriate measures of the risk of an individual security if an investor's portfolio is composed of that security only.
