Stocks Beginner: Types of Stock

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1.
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.
2.
Growth stocks are ________ to appreciate in price.
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Expected. Since future performance is not guaranteed, growth status is determined by investor expectations. The investors use past performance as a guide.
3.
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.
4.
A new company that habitually reinvests its dividends qualifies as a blue chip company.
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False. Blue chip companies are both established and able to pay dividends consistently.
5.
A value stock is a stock that ________.
Choose wisely. There is only one correct answer.
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.