One Characteristic of Mid-Cap Stocks Is That They

question 46

Multiple Choice

One characteristic of mid-cap stocks is that they

• A) are generally new firms with high growth potential.
• B) tend to be highly volatile.
• C) are fairly good-sized companies that offer attractive return opportunities.
• D) are traded primarily through pink sheet bids.

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Definitions:

Expected Return

The average of a probability distribution of all possible returns that an investment might generate.

Dividend Yield

A financial metric indicating the annual dividend payment of a company as a proportion of its share price.

Constant Growth

A model, often referred to as the Gordon Growth Model, that assumes a firm's dividends grow at a consistent rate indefinitely, used to evaluate the fair value of a stock.

Capital Gains Return

The profit realized from the sale of securities or investments which have increased in value over the time they were held.