Which fund is composed of stocks with potential to rapidly grow in value?

• A. Growth Fund
• B. Income Fund
• C. Balanced Fund
• D. Index Fund

Answer: (A)

Growth-focused investing targets companies expected to expand quickly, driving price appreciation rather than current income. A Growth Fund selects stocks in businesses with above-average growth potential, often in tech or innovative sectors, aiming for capital appreciation even if that comes with higher volatility and less current income. In contrast, an Income Fund emphasizes dividends or interest to generate income; a Balanced Fund blends stocks and bonds for a mix of growth and income; an Index Fund aims to track a market index, providing broad exposure rather than targeting rapid growth in a few stocks. Because the question is about stocks with potential to rapidly increase in value, the Growth Fund best fits that objective.