Stocks Beginner: Small, Mid, and Large-Cap Stocks

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1.
A medium-sized stock with a good growth record and the potential of becoming a large-cap stock is called a _______.
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Baby blue chip. In other words, the issuer is likely to become a blue chip company.
2.
Large-cap stocks are stocks with _______.
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Large market values. "Cap" means capitalization. Large-cap stocks are stocks with large market values.
3.
Why do growth and aggressive-growth mutual funds include small-cap stocks in their portfolios?
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Small-cap stocks are growth-oriented. As a result, they are very popular in growth-oriented mutual funds.
4.
If the Zap! Internet stock is selling for $50 per share, and 4 million shares of it are owned by public investors, what is its capitalization?
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$200 million. To calculate capitalization, multiply the price per share by the number of shares owned by the public.
5.
The XYZ Hi-Technology company is four years old and already has a market value of one billion dollars. Its stock is therefore large-cap.
Choose wisely. There is only one correct answer.
False. Large-cap stocks are the stocks of large, established companies. This hypothetical company does not fit that definition.