Stocks Beginner: Growth Stocks

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1.
You are most likely to find growth stock issued by companies in fields that have achieved stable or flat growth.
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False. You are most likely to find growth stock issued by companies in high-growth industries.
2.
Which of the following is most likely to issue a growth stock?
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A company that has many untapped potential markets. Such a company has a high likelihood of continued growth.
3.
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.
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.
An investor with a long investment horizon may decide to invest in growth stocks.
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True. Younger investors may purchase growth stocks, expecting to hold them for a long period and take advantage of their ability to provide above-average returns over time.