1. Which of the following statements is true?

1.The investment portfolio of younger investors should be heavily weighted toward conservative assets such as government bonds and blue chip stocks.

2. The relationship between risk and potential reward is inverse.

3. During an economic contraction, bond prices are likely to rise.

4. Bond prices and interest rates fluctuate directly.

2. Which of the following statements is true?

1. A growth stock would pay low (or no) dividends.

2. Low cap stocks provide the lowest potential rate of return.

3. Blue chip stocks provide a greater growth potential than growth stocks.

4. A risk averse investor would prefer low cap stocks to large cap stocks.