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?
Choose wisely. There is only one correct answer.
Treasury. The company returns this stock to its treasury.
2.
Income stocks would be most popular with _______.
Choose wisely. There is only one correct answer.
Someone who wanted to meet current living expenses. The other two individuals would most likely choose a growth investment to meet their needs.
3.
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.
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.
Why do growth stocks pay little by way of dividends?
Choose wisely. There is only one correct answer.
The issuing company reinvests profits to finance future growth. This is a common practice among rapidly growing companies.