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Stocks Beginner: Small, Mid, and Large-Cap Stocks

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1.
Large-cap stocks are more likely than small-cap or mid-cap stocks to pay dividends.
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True. This is partly because they have enough funds to finance future growth. Some of them, however, may have less room to grow.
2.
The XYZ Hi-Technology company is four years old and already has a market value of one billion dollars. Its stock is therefore large-cap.
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False. Large-cap stocks are the stocks of large, established companies. This hypothetical company does not fit that definition.
3.
A medium-sized stock with a good growth record and the potential of becoming a large-cap stock is called a _______.
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Baby blue chip. In other words, the issuer is likely to become a blue chip company.
4.
________ is a characteristic of small-cap stocks.
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Price volatility. Because small-cap companies may behave unpredictably, their stocks may, too.
5.
If the Zing! Internet stock has a capitalization of $100 million dollars, it is probably a _______ stock.
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Small-cap. By most models, this capitalization is quite small.