Patrick graduated from college five years ago. He has set up an emergency fund and has been paying off his student loans. In addition, he participates in the retirement plan offered by his employer. He wants to invest $75 per month in very small companies (capitalization between $50 and $300 million or less). He should purchase _______ stocks.

Question

Quizplus · Accepted Answer

Micro cap stocks typically have a market capitalization between $50 and $300 million, which matches Patrick's criteria for investing in very small companies. Blue chip and midcap stocks may be larger and more established companies, while income stocks may prioritize paying dividends over growth potential. Penny stocks may be too risky for a long-term investment strategy.

Patrick Graduated from College Five Years Ago