Future Business Leaders of America (FBLA) Securities and Investments Practice Test

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Study for the FBLA Securities and Investments Test. Enhance your financial expertise with well-crafted questions, hints, and detailed explanations. Get exam-ready today!

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Which investment objective seeks capital appreciation primarily through common stock?

Income
Yield
Growth
Capital preservation

The correct answer is: Growth

The objective of growth in investments focuses on increasing the overall value of an investment portfolio primarily through capital appreciation. This is typically achieved by investing in common stocks, which have the potential for significant price increases over time. Growth-oriented investors are primarily interested in the increase of their principal amount rather than immediate income or dividends. Investing in common stocks can yield high returns, especially over long periods, as the companies may expand and increase their earnings. Therefore, a growth investment strategy aligns with the goal of capital appreciation. Investors aiming for growth are usually willing to accept higher risk levels, as they anticipate that the value of their investments will rise more significantly than safer options over time.