General Securities Representative (Series 7) Practice Exam – Your All-in-One Guide to Exam Success!

A defining characteristic of blue-chip stocks is their history of steady and reliable growth. Blue-chip stocks are typically issued by large, well-established companies with a strong reputation for financial stability and the ability to generate consistent earnings. These companies often have a solid track record of performance through various market conditions, which enables them to pay dividends regularly and offer potential for capital appreciation over the long term. This characteristic makes them a favored choice among conservative investors seeking stability and less risk in their investment portfolios.

In contrast, the other options reflect traits that are not associated with blue-chip stocks. High volatility in price relates more to speculative stocks or growth-oriented portfolios rather than the stability sought after with blue-chip investments. Blue-chip companies typically do not operate solely in niche markets but rather in broader, more established industries. Additionally, frequent changes in leadership are generally indicative of instability within a company, which is contrary to the steady and reliable nature of blue-chip stocks.