A blue-chip share generally exhibits __________ over time.

A) little growth
B) strong growth
C) low volatility
D) strong volatility

Question

A blue-chip share generally exhibits __________ over time.

A) little growth
B) strong growth
C) low volatility
D) strong volatility

Quizplus · Accepted Answer

Financial advisers often prescribe that blue-chip shares are an essential component of a successful equity portfolio.While there is no formal definition as to what constitutes blue-chip shares,they can be regarded as an equity investment in a large established firm that has a relatively low level of risk.A blue-chip share is regarded as stable and a sound financial investment.The word quality is often associated with blue-chip shares.The advantage of blue-chip shares is that they generally move with the market,which is not surprising,as their large size means that they represent a large proportion of the value-weighted market portfolio.Blue-chip shares tend to have equity betas close to one,which means that they generally yield returns close to that earned by the market.Further,blue-chip shares tend to have stable dividend yields.

A Blue-Chip Share Generally Exhibits __________ Over Time