What type of investor is most likely to be drawn to growth stocks?

"Risk-averse investors seeking stable income" "Investors looking for short-term profits" "Risk-tolerant investors seeking high returns" "Investors primarily interested in dividend payouts"

What financial metric is commonly used to identify potential growth stocks?

"Dividend yield" "Price-to-book ratio" "Price-to-earnings ratio" "Earnings per share"

What does a high price-to-earnings (P/E) ratio suggest about a company?

"The company is likely to issue consistent dividends" "The company is undervalued by the market" "The company has high growth potential" "The company is experiencing financial distress"

What is a key advantage of the price-earnings to growth (PEG) ratio over the P/E ratio?

"It considers the company's debt levels" "It factors in the company's earnings growth rate" "It reflects the company's dividend payout history" "It accounts for the company's market share"

Why might a company issuing growth stocks choose to forgo dividend payments?

"To reduce tax liabilities" "To increase shareholder value" "To reinvest profits for expansion" "To signal financial stability"

How do growth stocks act as a hedge against inflation?

"They offer guaranteed fixed returns" "Their returns typically outpace inflation rates" "They are backed by tangible assets" "They are less volatile than other investments"

What is a significant risk associated with investing in growth stocks?

"They tend to have low trading volumes" "They are highly susceptible to market fluctuations" "They are primarily issued by established companies" "They offer limited potential for capital appreciation"

What characteristic distinguishes value stocks from growth stocks?

"Value stocks are issued by companies with high growth potential" "Value stocks prioritize dividend payments over reinvestment" "Value stocks are considered undervalued by the market" "Value stocks typically have high price-to-earnings ratios"