Stocks Beginner: Introduction to Stocks

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1.
Which of the following statements is true?
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Bonds pay fixed income; common stock doesnt. Bonds pay a fixed interest rate; stock values and dividends depend on the performance of the company.
2.
Which type of broker provides investment research and assistance with making investment decisions?
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Full-service. In return for higher commissions, the broker offers investment advice and research.
3.
Common stock is less predictable than preferred stock.
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True. Since preferred stock pays a fixed premium, it is more predictable than common stock.
4.
Volatile stocks always show a better return than the rest of the market.
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False. While volatile stocks show greater price fluctuations than the rest of the market, those fluctuations can be up or down.
5.
Buying highly volatile stocks may be _______.
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Either A or B. Buying highly volatile stocks may be the quickest way to make or to lose money on the market. Since volatile stocks have greater and/or more frequent fluctuations in value than the market as a whole, they can be the quickest way to either make OR lose money.