A portfolio of small-company common stocks is best described as the stocks of the firms which: ...

Question:

A portfolio of small-company common stocks is best described as the stocks of the firms which:

a) are included in the Samp;P 500 index.

b) represent the smallest twenty percent of the companies listed on the NYSE.

c) trade publicly for $5 a share or less. have gone public within the past five years.

d) are too small to be listed on the NYSE.

Small Cap Stocks:

This question calls for a general understanding of the category of companies known as small cap stocks. This term refers to companies that have relatively small market capitalizations (the market value of a company's outstanding shares).

The definition of small cap is somewhat ambiguous and varies across the investing universe. Generally, a small cap is a firm with a market capitalization between $300 million and $2 billion.

Answer and Explanation: 1

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The best possible answer is b) represent the smallest twenty percent of the companies listed on the NYSE. The other answers are erroneous for the...

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Stocks: Understanding Investment Performance

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Chapter 8 / Lesson 6
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Stocks are an investment into the shares or ownership of a company and repay the shareholder dividends throughout the year. Learn more about stocks, investment performance, dividends, the role of the stock exchange, and how to calculate earnings.


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