Stocks Beginner: Types of Stock

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1.
What stock market indicator is made of blue chip stocks?
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The Dow Jones Industrial Average. This average is made of 30 blue chip stocks.
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.
A value stock is a stock that ________.
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Is currently valued for less than it is really worth. In the case of value stocks, market prices do not reflect the earnings and growth potential of the issuing company.
4.
Why do growth stocks pay little by way of dividends?
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The issuing company reinvests profits to finance future growth. This is a common practice among rapidly growing companies.
5.
The stock of which of the following companies probably does not qualify as income stock?
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An Internet company. Internet companies are too new for their stocks to qualify as income stock.