Chartered Investment Manager (CIM) Practice Exam · Question
An equity portfolio manager employs a growth strategy. Which characteristic would be most emphasized when selecting stocks for this portfolio?
Growth investing focuses on companies expected to grow at an above-average rate compared to the market, typically characterized by strong earnings momentum and
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Question: An equity portfolio manager employs a growth strategy. Which characteristic would be most emphasized when selecting stocks for this portfolio?
Answer options:
- High dividend yields and low price-to-earnings (P/E) ratios. ✅ Companies with strong earnings momentum and scalable business models.
- Mature companies with stable cash flows and established market share.
- Companies operating in highly regulated industries with predictable revenue.
Correct answer: Companies with strong earnings momentum and scalable business models.
Explanation: Growth investing focuses on companies expected to grow at an above-average rate compared to the market, typically characterized by strong earnings momentum and opportunities for expansion.
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