What characterizes blue chip stocks?

Blue chip stocks are characterized by being shares in large-cap companies that have a history of strong performance and stability. These companies are typically well-established, rely on a sound management strategy, and possess a solid reputation for reliability and ability to generate consistent revenues. One of the defining traits of blue chip stocks is their capacity to deliver steady earnings, which often translates into the regular payment of dividends to shareholders.

Investors are often attracted to blue chip stocks due to their resilience in various market conditions. This resilience comes from the companies' broad market presence, extensive resources, and capacity to adapt to economic changes, making them less risky compared to smaller or less established companies.

The other choices highlight characteristics that do not align with the fundamental traits of blue chip stocks. For instance, low-priced stocks traded on the OTC market are typically considered higher risk and less stable, while companies described as having high volatility do not represent the steady performance associated with blue chips. Stocks with minimal shareholder rights do not reflect the robust governance usually seen in well-established firms.