Stocks Beginner: Types of Stock

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1.
A new company that habitually reinvests its dividends qualifies as a blue chip company.
Choose wisely. There is only one correct answer.
False. Blue chip companies are both established and able to pay dividends consistently.
2.
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.
3.
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.
4.
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.
5.
An investor who can withstand a stock whose value rises and falls with the economy may want to choose a _______ stock.
Choose wisely. There is only one correct answer.
Cyclical. Cyclical stocks move up or down with the business cycle.