What defines Large Cap Stocks in terms of market capitalization?

Large Cap Stocks are defined as those stocks belonging to companies with a large market capitalization, typically valued at over $10 billion. These companies are often well-established with a history of stable earnings, a strong market presence, and they usually have a diversified range of products or services. The significance of large cap stocks lies in their potential for stability and lower volatility compared to smaller companies, which are often more susceptible to market fluctuations.

Investing in large cap stocks is generally considered less risky because these companies tend to have more financial resources and a greater ability to weather economic downturns. They are also frequently included in major stock indices, providing a barometer for the overall market performance and giving investors a sense of security.

In contrast, the other options refer to types of stocks associated with different market capitalizations or characteristics that do not align with the definition of large cap stocks. This focus on large cap stocks aligns with the investment strategies and risk profiles of many institutional and individual investors, emphasizing their role in a well-diversified investment portfolio.