Worksheet 1: Types of Stocks (DOK 1 & DOK 2)

What is the primary characteristic of blue chip stocks?

• They are highly speculative and volatile

• They are shares of large, stable companies with a history of reliability

• They have low market capitalization

• They do not pay dividends

Match each type of stock to its description:

• Stocks that provide stable performance regardless of economic conditions

• Dividend Stocks

• Stocks priced under $5, highly speculative

• Defensive Stocks

• Stocks that fluctuate with economic cycles

• Penny Stocks

• Stocks that regularly pay shareholders a portion of profits

• Cyclical Stocks

True or False: Dividend stocks provide guaranteed payments to shareholders.

• True

• False

Fill in the Blank: The term "blue chip stocks" comes from ____________, where blue chips were the most valuable.

• poker

• the stock market

• the casino industry

• the financial sector

Which of the following is an example of a defensive stock?

• Airlines

• Fast food chains

• Healthcare companies

• Car manufacturers

True or False: Small cap stocks are generally less risky than large cap stocks.

• True

• False

A dividend reinvestment plan, also called a __________, allows investors to automatically buy more shares using dividend payouts.

• dividend reinvestment plan

• stock purchase plan

• investment growth plan

• share accumulation plan

Match the following stock types with their typical industry examples:

• Defensive Stocks

• Utilities, Food and Beverage Companies

• Cyclical Stocks

• Apple, Amazon, Microsoft

• Large Cap Stocks

• Airlines, Hotels, Car Manufacturers

Which of the following is NOT a common characteristic of penny stocks?

• Priced under $5 per share

• High liquidity and ease of trading

• High volatility

• Risk of fraud

Market capitalization is calculated by multiplying __________ by the total number of shares outstanding.

• the price per share

• the net income

• the total revenue

• the gross profit