While the majority of American investors understand the importance of diversifying across growth and value investments, few are able to achieve a passing grade on a test of their knowledge of the differences between the two, according to a new American Century Investments survey.
Test your knowledge with the Growth & Value IQ quiz below:
1. Which best describes a growth stock?
a) Stock that offers guaranteed rate of growth tied to consumer price index.
b) Stock in a company specializing in agriculture, lumber, landscaping, and other organic products.
c) A stock in a company demonstrating better than average profit and earnings gains.
d) All of the above.
2. Which best describes a value stock?
a) Stock in fast-growing company specializing in high-value, low-cost products, like a discount retailer.
b) Stock in a company specializing in valuable goods, like precious metals and jewelry.
c) Stock that has a low price-to-book ratio.
d) All of the above.
3. Which statement is true?
a) Value stocks outperformed growth stocks between 1927 and 2001.
b) Smaller company value stocks...
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