Stocks & Investments

Stocks and dividends are:

• Types of financial instruments; dividends are payments made to shareholders from company profits.

• Types of loans; dividends are interest paid on loans.

• Types of insurance; dividends are premiums paid to policyholders.

• Types of taxes; dividends are government grants.

Where can you buy and sell stocks?

• At a stock exchange

• At a grocery store

• At a car dealership

• At a library

The price of a stock is determined by:

• Supply and demand in the market

• The company's logo

• The color of the stock certificate

• The weather

Companies issue stock to:

• raise capital

• reduce competition

• increase debt

• avoid taxes

People buy stock because:

• They want to own a part of a company and potentially earn a profit.

• They want to avoid all financial risks.

• They are required by law to do so.

• They want to lose money.

What is a stock? Fill in the blank: A stock represents part _______ of a company.

• ownership

• location

• product

• employee

Which of the following gives you the right to vote at shareholders’ meetings and to receive dividends?

• Common stock

• Preferred stock

• Both A and B

• Neither A nor B

What is the main difference between common stock and preferred stock?

• Common stockholders have voting rights, while preferred stockholders usually do not.

• Preferred stockholders have voting rights, while common stockholders usually do not.

• Both have equal voting rights.

• There is no difference between common and preferred stock.

If a company has 1,000 shares of stock outstanding and one person owns 100 shares, what percentage of the company does that person own?

• 10%

• 1%

• 5%

• 20%

Stock comes in the form of:

• Liquid

• Solid

• Gas

• Powder