Speculative stocks carry a high risk. Which of the following is/ are characteristics of speculative stocks?...
Speculative stocks carry a high risk. Which of the following is/ are characteristics of speculative stocks?
I. have a proven record of success
II. Pay very high dividends
- I only
- II only
- Both I and II
- Neither I nor II
Homework Answers
Answer is option d) Neither I nor II
Speculative stocks carry high risk and have a very less chance of success (it does not have proven record of success).
Generally, these stock have a very weak financial position (less profitability, lower solvency ratios, lower cash balances, etc.). So generally speculative stocks does pay dividends or pay very less dividends or have very inconsistent dividends.
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