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1.
Which of the following is a strategy that the manager of an aggressive-growth mutual fund may use to increase the funds value?
Frequent buying and selling. This strategy helps the manager avoid the risk that a stock will plunge in value.
2.
Stocks that sell below their worth are called _______ stocks.
Value. Stocks that managers believe are selling for less than they are worth are called value stocks.
3.
The stocks that growth mutual funds invest in may not pay dividends.
True. A corporation may reinvest its surplus earnings back into its stocks to expand the company rather than pay dividends.
4.
Large-cap companies are popular choices for growth mutual funds.
False. Although they may be included, they are not as frequently chosen as small-caps and mid-caps are. These latter companies generally have more room to grow than large-caps do.
5.
Growth funds seek to grow for the short term.
False. Even though they try to earn large profits quickly, growth funds seek to grow over long periods.