FP Obj 1.04 Stock

Which of the following is not a reason that companies issue stock:

• To gain respect

• To develop new products

A place where investors can trade securities that have been issued by a corporation is known as a(n)

• stock market index.

• secondary market.

A company that Marcus invested in has earned a profit, and now Marcus is receiving a cash payment. This is an illustration of

• dividends.

• a stock split.

Robyn bought $100 worth of stock in a company, and now it’s worth $150. This is an illustration of

• capital appreciation.

• dividends.

Jamie owned 300 shares of stock in a certain company, worth $10 per share. Then, the company announced that his 300 shares would become 600 shares, worth $5 per share. This is an illustration of

a stock exchange.

• a stock exchange.

• a stock split.

Which type of stock comes with voting rights?

• Preferred

• Common

type of stock is considered a “bargain”?

• Domestic

• Value

Because stocks in pharmaceutical companies hold their value regardless of the state of the economy, they are known as __________ stocks.

• defensive

• penny

A stock with a price of $1 or less is known as a __________ stock.

• penny

• value

To get a general idea of the direction of the stock market today, check a

• secondary market.

• stock market index.