What are frontier stocks generally characterized as?

Frontier stocks are typically associated with markets that are fairly new and less developed compared to established markets. These stocks come from countries that have lower liquidity and market capitalization compared to more mature markets. Investors often view frontier markets as having high growth potential due to their emerging economies, even though they may also pose higher risks and volatility.

In contrast, highly established markets refer to those that are well-developed and stable, populated by companies with a long track record of performance. Large-cap stocks refer to companies that have a large market capitalization, usually well-established firms in developed markets. Blue-chip stocks are shares in large, reputable companies known for their reliability, stability, and ability to generate steady returns. Therefore, the defining characteristic of frontier stocks is their association with new and emerging markets, which is accurately captured in the correct answer.