Legal Definitions - blue chip

Definition: A blue chip is a type of corporate stock that is considered a safe investment because the corporation has a history of stability, consistent growth, and reliable earnings. Blue chip stocks are known for their high-quality and low-risk nature.

Example: One example of a blue chip stock is Coca-Cola. Coca-Cola is a well-established company that has been around for over 100 years. It has a history of consistent growth and reliable earnings, making it a safe investment for those looking for a low-risk option.

Explanation: The example of Coca-Cola illustrates the definition of a blue chip stock because it is a well-established company with a history of stability and consistent growth. Investors can rely on Coca-Cola to provide a steady return on their investment, making it a safe choice for those looking for a low-risk option.