What are the types of common stock? There are many types of common stock, each of which offers the investor different risks and rewards. Suppose you currently own stock in two different types of companies, Company A and Company B. The chart below depicts the share values of Company A and Company B’s stock for the years 2000-2012. Based on what you know about the different company types, identify which line is more likely to correspond to which company. Company A Company B Company A is a stock company known for its stable stream of earnings that risk. Company B is stock company known for fluctuating P/E ratios and of high earnings. True or False: One way of protecting against the kind of stock-value losses suffered by most stocks during the 2009 recession is by investing in cyclical stocks. True False
What are the types of common stock? There are many types of common stock, each of which offers the investor different risks and rewards. Suppose you currently own stock in two different types of companies, Company A and Company B. The chart below depicts the share values of Company A and Company B’s stock for the years 2000-2012. Based on what you know about the different company types, identify which line is more likely to correspond to which company. Company A Company B Company A is a stock company known for its stable stream of earnings that risk. Company B is stock company known for fluctuating P/E ratios and of high earnings. True or False: One way of protecting against the kind of stock-value losses suffered by most stocks during the 2009 recession is by investing in cyclical stocks. True False
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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What are the types of common stock?
There are many types of common stock, each of which offers the investor different risks and rewards. Suppose you currently own stock in two different types of companies, Company A and Company B.
The chart below depicts the share values of Company A and Company B’s stock for the years 2000-2012. Based on what you know about the different company types, identify which line is more likely to correspond to which company.
|
Company A
|
Company B
|
|---|---|
| Company A is a stock company known for its stable stream of earnings that risk. | Company B is stock company known for fluctuating P/E ratios and of high earnings. |
True or False: One way of protecting against the kind of stock-value losses suffered by most stocks during the 2009 recession is by investing in cyclical stocks.
True
False
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