Investment Products: STOCKS (W!se 7:2)

What is another name for a stock?

• Equity

• Real estate

• Bonds

Answer explanation

Made you read the first slide.

Why do companies "go public" or become public corporations and issue stocks?

• To avoid government regulations

• To raise money for growth or expansion

• To increase competition

Answer explanation

Companies go public for a number of reasons, and these reasons can be different for each company. Some of the reasons include:

• To raise capital and potentially broaden opportunities for future access to capital.

• To increase liquidity for a company’s stock, which may allow owners and employees to sell stock more easily.

How can you find the price of a stock?

• By checking the company's CEO

• By analyzing the company's social media posts.

• By using the stock symbol and checking the open, close, and net change price.

How do you calculate capital gains or losses from selling stock?

In other words, how do you determine how much you earned or lost on your stock?

• (selling price - purchase price) x (shares of stock)

• (selling price / purchase price) x (shares of stock)

• (selling price - purchase price) / (shares of stock)

Answer explanation

• A capital gain is the increase or a capital loss is a decrease in the stock's value and is realized when it is sold.

What factors can influence stock prices?

• War (think airplane manufacturers)

• Economic news (covid closes down the economy)

• A new product launch (a new Apple iPhone or vaccine during covid)

• Bankruptcy (a company has no money left)

Answer explanation

• Stock prices are driven by a variety of factors, but ultimately the price at any given moment is due to the supply and demand at that point in time in the market.

https://www.investopedia.com/articles/basics/04/100804.asp

Who declares dividends on stock?

• The company's CEO

• The stockholders

• The government

• The company's board of directors

Answer explanation

What Is Declaring a Dividend?

Companies often pay out a portion of their profits as dividends to the shareholders.

Dividend payouts are a way to provide shareholders with a return on their investment.

What is the purpose of dividends on stock?

• To fund the company's expansion

• To reward investors

• To increase the company's debt

• To reduce the stock price

Answer explanation

What are blue chip stocks?

• Stocks of new companies

• Stocks with high speculative characteristics

• Stocks of well-established companies with a history of stable earnings

What are growth stocks?

• Stocks with low risk potential

• Stocks of companies with potential for above-average growth

Answer explanation

Growth stocks are companies that investors believe will deliver better-than-average returns in the future.

Value stocks are typically considered low-risk, low-volatility investments, whereas growth stocks are higher-risk stocks with the potential for much larger upside over time.

What are income stocks?

• Stocks with potential for high growth

• Stocks with no dividends

• Stocks with dividends

Answer explanation

• INCOME STOCKS are stocks that offer regular and steady income, usually in the form of dividends, over a period of time with low exposure to risk.

• Walmart Inc. is an example of an income stock. Its stock price has risen over the last thirty years and has consistently increased its dividend payout.

https://www.investopedia.com/terms/i/incomestock.asp#:~:text=Income%20stocks%20are%20stocks%20that,of%20the%20security's%20overall%20returns.