STOCK MARKET

A type of share which has a fixed rate of interest and is payable whether profits are made or not includes

• Preference shares  

• Debentures  

• Cumulative preference shares

• Participating preference shares

Which of the following can be referred to as a characteristic of the stock market?

 

•     Costs and prices  

•   Risk and benefits

• Interest and profit

• Premiums and investment

The price an investor pays for a share on the stock exchange is called

•    Market value   

• Nominal value  

• Par value

• Yield

Tom invests his savings by buying shares in a .company. From this investment Tom expects to receive

• profits

• interests

•  revenues

• dividends

One of the roles of a stock market is to:

• Buy shares from shareholders who want to sell

• Allow buyers and sellers of shares to trade in second-hand shares

• Provide loans to all types of companies

• Allow private limited companies to raise capital from the sale of shares to the public.

One of the risks of buying shares is:

• The share price might rise much higher than the shareholder expected

• Other shareholders might want to buy shares in the same company

•   The company might collapse and the shares become worthless

• Interest rates might and reduce the return on shares

A ‘stag’ in a stock market is a share trader who: 

• Buys more shares because they might fall in price

• Buys more shares because they might increase in price

•   Sells shares as there is pessimism about share prices.

• Buys new issues of shares and sells them quickly

A bull market in a stock market is one where:

• More investors believe that share prices will fall than rise

• More investors believe that share prices will rise than fall

• Most investors are willing to sell their shares

• Shareholders are only willing to buy new issues of shares

A key feature of an ordinary share is that:  

• One share equals one vote at the Annual General Meeting

•   Dividends are paid at a fixed rate of return each year

• They do not carry voting right, unlike preference shares which do

• If the company fails and its assets are liquidated, holders of ordinary shares are paid back first

What is the primary distinction between a share and a stock?

• A share represents ownership in a company, whereas a stock only indicates voting rights.

• Shares are individual units of ownership, while stocks refer to a collection of such shares grouped together.

• Shares are always traded in bulk, but stocks are sold individually.

• A stock includes fixed interest, while a share includes dividends only.