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1.
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.
2.
On average, an economic downturn affects a growth stock more than it affects the stock of other companies.
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False. An economic downturn affects a growth stock less than the stock of other companies.
3.
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.
4.
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.
5.
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.