Stocks Beginner: Growth Stocks

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1.
Young, start-up companies often issue growth stock.
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False. Companies that have established a record of increasing earnings issue growth stocks.
2.
Growth stock is issued by companies that ______.
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Demonstrate earnings growth potential. Growth stock is issued by companies that have reported higher-than-average earnings growth and expect to continue to demonstrate high profit growth.
3.
Growth stocks are least likely to help investors reach the following goal:
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Provide current income. Growth stocks are especially suited to investors who can forgo current income.
4.
A big advantage of growth stocks is their ability to provide a regular income stream.
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False. Growth stocks provide little or no current income or dividends.
5.
A stock with a price/earnings ratio of 47 is likely a growth stock.
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True. A stock with a P/E ratio of more than 20 is likely to be a growth stock.