In context to stocks, which of the following primarily seeks appreciation through an increase in stock price?

Prepare for the FBLA Securities and Investments Exam with questions, flashcards, and hints to enhance your knowledge and boost your confidence. Excel on your exam!

The correct choice focuses on growth investors, who primarily seek appreciation through an increase in stock price. Growth investors look for companies that are anticipated to grow at an above-average rate compared to their industry or the broader market. They typically invest in stocks of companies that reinvest their earnings into the business for expansion rather than paying dividends. This reinvestment is aimed at boosting the company's market value, which in turn increases the stock price.

Growth investors are often attracted to emerging industries or businesses that show significant potential for revenue and earnings growth. The goal for these investors is to realize gains when they eventually sell the stock at a higher price once the growth materializes.

In contrast, income investors focus on generating regular income through dividends rather than capital appreciation. Value investors seek undervalued stocks they believe the market is mispricing, expecting that their value will eventually be recognized, which may include both appreciation and income. Dividend investors prioritize stocks that pay high dividends, and while they might see some price growth, their primary focus is on income generation rather than stock price increase alone.

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