Question

______ stocks sell for less than $2 and are considered risky investments.

A) Blue-chip
B) Penny
C) Growth
D) Dividend-paying

Answer 1

Penny stocks are the risky investments that sell for less than $2, and differ from the more stable blue-chip or dividend-paying stocks.

Step-by-step explanation:

The type of stocks that sell for less than $2 and are considered risky investments are penny stocks. Unlike blue-chip stocks, which are shares of well-established companies with stable earnings, penny stocks are shares of small companies and are often subject to volatile market swings.

Those investing in the stock market can expect a wide range of possible returns, and penny stocks often come without the reliability of dividends that more established companies might offer. Diversifying your portfolio is a key strategy in managing investment risk, which could include a mix of stocks, bonds, and mutual funds. Investors can begin by purchasing stocks through a brokerage or online trading platform.