Jack and Diane decide to start a hedge fund. Jack is looking at a paper company that is currently losing money but Jack thinks it will fare much better in the future as prices for pulp are starting to rebound. Diane likes to buy stocks that are trading at low multiples to free cash flow versus the market.
1. Jack’s paper stock would be best described as:
A. A defensive stock
B. A growth stock
C. A cyclical
D. None of the above
2. Diane’s investment strategy would be best described as:
A. Growth
B. Value
C. Momentum
D. GARP