Stocks Beginner:
Growth Stocks
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1.
Which of the following is most likely to issue a growth stock?
Choose wisely. There is only one correct answer.
A utility company
A company that has reached a sales plateau of $10 billion
A company that has many untapped potential markets
A financial services company
A company that has many untapped potential markets. Such a company has a high likelihood of continued growth.
2.
A big disadvantage of growth stocks is their inability to guarantee your principal.
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True
False
True. A big disadvantage of growth stocks is a greater risk of loss of principal.
3.
Young, start-up companies often issue growth stock.
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True
False
False. Companies that have established a record of increasing earnings issue growth stocks.
4.
Growth stocks are most likely to benefit investors who _______.
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Seek a slow, steady rate of return
Aim to receive a regular income
Desire a high rate of return
Want a risk-free investment
Desire a high rate of return. Growth stocks usually provide better-than-average returns over time.
5.
On average, an economic downturn affects a growth stock more than it affects the stock of other companies.
Choose wisely. There is only one correct answer.
True
False
False. An economic downturn affects a growth stock less than the stock of other companies.
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