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Stocks Beginner: Types of Stock

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1.
Issuers of income stock have all of the following characteristics except _______.
Choose wisely. There is only one correct answer.
Rapid expansion. Growth does occur in such companies, but it is not rapid.
2.
Which of the following stocks performs well during a market downturn?
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Defensive. During downturns, some companies do well because their services are needed at all phases of the business cycle.
3.
Investors buy value stocks because they believe the stocks will always be inexpensive.
Choose wisely. There is only one correct answer.
False. Investors buy them because they believe the stocks will rise in value soon. Value investors profit from these increases in value.
4.
What stock market indicator is made of blue chip stocks?
Choose wisely. There is only one correct answer.
The Dow Jones Industrial Average. This average is made of 30 blue chip stocks.
5.
Growth stocks pay little in the way of dividends because they earn very little income.
Choose wisely. There is only one correct answer.
False. The dividend scarcity is due to the practice of the issuing company reinvesting profits to finance future growth.