Stocks Beginner: Types of Stock

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1.
Which of the following stocks is so called because it has been repurchased by the issuing company?
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Treasury. The company returns this stock to its treasury.
2.
Growth stocks pay little in the way of dividends because they earn very little income.
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False. The dividend scarcity is due to the practice of the issuing company reinvesting profits to finance future growth.
3.
Why would a value investor watch for changes in operations at a corporation?
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Changes in operations may drive up the company's stock price. The value investor looks for growth in a stock's price.
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.
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.