Unit # 3 - Stock Market

What is a stock? Fill in the blank: A stock is a portion of _______ in a corporation. It is a way for a corporation to raise money and expand.

• ownership

• debt

• location

• equipment

Stocks are also known as: Choose the correct answer.

• Bonds

• Shares

• Loans

• Mortgages

What is the most common type of stock bought?

• Preferred Stock

• Common Stock

• Bond

• Mutual Fund

If you own common stock in a company, what do you usually have?

• A guaranteed dividend

• An ownership stake and a vote in shareholder matters at the annual (yearly) shareholder meeting

• No rights

• Only a loan to the company

Why do people buy stocks?

• To make high returns (profit) on their investments/money

• To lose money

• To avoid any risk

• To keep money idle

The average stock market investment return is about ____% per year for nearly the last century.

• 10

• 5

• 15

• 20

What is one of the primary benefits of investing in stocks?

• Guaranteed returns

• The potential to earn higher returns

• No risk involved

• Fixed interest rates

What is one benefit of investing in stocks compared to real estate investments?

• A) Stocks are less risky

• B) Stocks are more liquid and can be sold at any time

• C) Stocks always increase in value

• D) Stocks require a large initial investment

You can start investing in stocks with any amount of money you would like to invest

• True

• False

What are dividends?

• Loans given to corporations

• Portions of a corporation’s profit

• Taxes paid by stockholders

• Fees for buying stocks