Stocks Beginner: Growth Stocks

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1.
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.
2.
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.
3.
Growth stocks are most likely to benefit investors who _______.
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Desire a high rate of return. Growth stocks usually provide better-than-average returns over time.
4.
Growth stocks offer investors the prospect of _______.
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Large investment gains. Growth stocks offer investors the prospect of large stock price increases as company earnings grow.
5.
A big disadvantage of growth stocks is their inability to guarantee your principal.
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True. A big disadvantage of growth stocks is a greater risk of loss of principal.