Stocks Beginner: Growth Stocks

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1.
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.
2.
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.
3.
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.
4.
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.
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.