Stocks Beginner: Types of Stock

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1.
An investor who can withstand a stock whose value rises and falls with the economy may want to choose a _______ stock.
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Cyclical. Cyclical stocks move up or down with the business cycle.
2.
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.
3.
Blue chip stocks are not likely to be _______.
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Volatile. Blue chip stocks are established and in demand.
4.
Investors buy value stocks because they believe the stocks will always be inexpensive.
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False. Investors buy them because they believe the stocks will rise in value soon. Value investors profit from these increases in value.
5.
Income stocks would be most popular with _______.
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Someone who wanted to meet current living expenses. The other two individuals would most likely choose a growth investment to meet their needs.