Which One of These Statements Must Be Correct

Multiple Choice

Which one of these statements must be correct?

A) Long-term expected rates of return are inversely related to risk premium.
B) The lower the risk premium the higher a security's average rate of return.
C) Risk premium is defined as the nominal rate of return minus the rate of inflation.
D) One security can have both a higher standard deviation and a lower risk premium than another security for the same historical period.
E) A security with a standard deviation of 9.9 percent for a stated historical period will have a higher average rate of return for that period than a security with a standard deviation of 9.6 percent.