Which of the following are characteristics of small cap stocks?
I. strong balance sheets
II. annual revenues less than $250 million
III. potential for high returns along with high risk
IV. potentially dramatic changes in their earnings

Question

Quizplus · Accepted Answer

Small cap stocks have annual revenues less than $250 million and are known for potential high returns along with high risk. They may have potentially dramatic changes in their earnings as they are often in the early stages of growth. While they may not always have strong balance sheets like larger companies, some small cap stocks do have strong financials. Therefore, characteristics I, III, and IV are all associated with small cap stocks.

Which of the Following Are Characteristics of Small Cap Stocks