Stocks Beginner: Growth Stocks

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1.
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.
2.
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.
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 carry less risk for the investor than the stocks of companies on average.
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False. Growth stocks carry more risk for the investor than the stocks of companies on average.
5.
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.