Stocks Beginner: Introduction to Stocks

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1.
The best way to make a lot of money quickly is to buy and sell blue chip stocks.
Choose wisely. There is only one correct answer.
False. Blue chip stocks have low volatility, so any growth in value is likely to be slow.
2.
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.
3.
A _______ broker helps customers make decisions on investments.
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Full-service. The full-service broker includes investment assistance in his or her range of services.
4.
Jim just bought 200 shares of Microsoft. He is now part owner of ______.
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All of the above. These are all examples of the companys assets. Stock ownership conveys equity in a companys assets.
5.
Common stock is less predictable than preferred stock.
Choose wisely. There is only one correct answer.
True. Since preferred stock pays a fixed premium, it is more predictable than common stock.