Strategy Intermediate: Investing for Income

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1.
The stocks of dividend-paying companies are popular among investors who want _______.
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Income. Neither low taxes nor capital appreciation are typical features of income stocks.
2.
Income investments usually provide income on a steady basis.
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True. Although it is not always guaranteed, income is usually continuous.
3.
Mutual funds pay dividends when their holdings pay dividends.
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True. Mutual funds are made of individual holdings. Their dividends are possible only when their holdings pay dividends.
4.
As an investor, you can receive income from your investments in all but which of the following ways?
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Increase in the value of an investment. Strictly speaking, it is only when funds are sent to you that you receive income.
5.
Companies that make big profits pay big dividends.
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False. Some of them reinvest their profits to finance future growth.