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Stocks Beginner:
Small, Mid, and Large-Cap Stocks
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1.
Baby blue chips are mid-cap stocks with good growth records.
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True
False
True. As such, they have a good chance of becoming blue chip stocks.
2.
What is capitalization?
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The number of stock shares owned by the public
The market value of a company
The price per share of a company
The dividend paid on a share of stock
The market value of a company. You can calculate it by multiplying the market price per share by the number of shares owned by the public.
3.
Small-cap companies do not pay dividends because they usually dont earn profits.
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True
False
False. Small-cap companies may forgo paying dividends to reinvest those dividends for future company growth.
4.
Why do growth and aggressive-growth mutual funds include small-cap stocks in their portfolios?
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Small-cap stocks pay high dividends.
The smaller the stock, the more a fund can include.
Small-cap stocks are growth-oriented.
Small-cap stocks are growth-oriented. As a result, they are very popular in growth-oriented mutual funds.
5.
Large-cap stocks are stocks with _______.
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High fees
Large market values
Caps on growth
Large market values. "Cap" means capitalization. Large-cap stocks are stocks with large market values.
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