Understanding Stocks and Bonds

What is the main purpose of selling shares of ownership in a company?

• To reduce company expenses

• To raise money to finance operations

• To hire more employees

• To improve stockbroker commissions

What are shares of ownership in a company called?

• Bonds

• Stocks

• Dividends

• Loans

What type of stock provides voting rights to stockholders?

• Preferred stock

• Corporate stock

• Common stock

• Government stock

Which type of stockholder receives preference in dividends?

• Common stockholders

• Bondholders

• Corporate stockholders

• Preferred stockholders

Where are stocks traded?

• Stock Market

• Corporate Office

• Government Building

• Bank

Who is authorized to trade on the stock market floor?

• Stockholders

• Business owners

• Stockbrokers

• Government officials

What do stockbrokers receive for their services?

• Interest

• Dividend

• Coupon payments

• Commission

Which of the following is a type of long-term investment where the purchaser becomes a creditor of the company?

• Stock

• Bond

• Dividend

• Loan

What is the face value of a bond known as?

• Market value

• Par value

• Discount value

• Interest value

What is the term for the annual interest paid on a bond?

• Dividend

• Coupon

• Premium

• Par value