Development and value What S is the difference between

 Although the majority of American investors recognise the significance of diversification between growth and value investments, according to a recent American Century Investments study, few are able to obtain a passing grade on a measure of their comprehension of the gaps between the two.

With the Growth & Value IQ quiz below, measure your expertise:

1. Which one defines a growth stock best?

(A) Stocks which give a guaranteed rate of growth linked to the index of consumer prices.

(B) Stock in a company which specialises in agriculture, wood, landscaping and other organic products.

(C) A company's portfolio that shows higher than average sales and earnings gains.

(D) All the following.

2. Which is the best value stock description?

(A) Stock in a fast-growing business that specialises in low-cost, high-value items, such as a discount retailer.

(B) Stock in a company which specialises in precious goods, such as precious metals and jewellery.

(C) An inventory with a low price-to-book ratio.

(D) All the following.

3. What claim is true?

(A) Between 1927 and 2001, value stocks outperformed growth stocks.

(B) Smaller stocks of company value outperformed larger stocks of company value between 1927 and 2001.

(C) A conservative investment strategy is commonly known to be maintaining a portfolio with a mix of growth and value stocks.

(D) All the following.

4. What fund performs better generally during times of strong economic expansion?

(A) Growth.

(B) Value.

(C) Neither.

(D) both.

5. Value funds, in general, outpaced growth funds in 2000 and 2001.

(A) True.

(B) False.

6. Generally speaking, during the 90s, growth funds outpaced value funds.

(A) True.

(B) False.

7. What kind of fund is more likely to invest in stocks that pay a large dividend?

(A) Growth.

(B) Value.

(C) Neither.

(D) Both.

8. What type of mutual fund will usually associate higher price-to-earnings ratios with stocks?

(A) Growth.

(B) Value.

(C) Neither.

(D) Both.

9. "In this example, what kind of stock is described: "Developed baked-goods business with a strong balance sheet and good cash flow experiencing a temporary decrease in response to changes in senior management.

(A) Growth.

(B) Value.

(C) Neither.

10. "What kind of stock is described in this example: "The software company is in the process of rolling out an eagerly awaited upgrade to a popular software application, enjoying steady sales increases.

(A) Growth.

(B) Value.