Stocks Beginner: Types of Stock

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1.
Growth stocks are ________ to appreciate in price.
Choose wisely. There is only one correct answer.
Expected. Since future performance is not guaranteed, growth status is determined by investor expectations. The investors use past performance as a guide.
2.
Investors buy value stocks because they believe the stocks will always be inexpensive.
Choose wisely. There is only one correct answer.
False. Investors buy them because they believe the stocks will rise in value soon. Value investors profit from these increases in value.
3.
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.
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.
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.