Understanding Fractional Shares

This video tutorial explains the concept of fractional shares, using examples to demonstrate how to calculate the value of an investment when owning fractional shares of a company. It introduces a formula to determine the investment value based on the stock price and the number of shares owned, whether whole or fractional. The video provides practical examples, such as Lucy's and Andrew's investments, to illustrate the application of the formula in real-world scenarios.

What is the purpose of creating a table in the introduction of fractional shares?

• To compare different investment strategies

• To list different companies

• To understand the relationship between stock price, number of shares, and investment value

• To calculate taxes

If a stock is priced at $1000 and you have $100, how many fractional shares can you buy?

• 0.01 shares

• 1 share

• 10 shares

• 0.1 shares

What is the formula to calculate the value of an investment?

• Value = Price + Shares

• Value = Price x Shares

• Value = Price - Shares

• Value = Price / Shares

Lucy spends $300 on a stock priced at $1500. How many fractional shares does she own?

• 0.2 shares

• 2 shares

• 0.02 shares

• 20 shares

What percentage of a single share does Lucy own if she has 0.2 fractional shares?

• 0.2%

• 200%

• 20%

• 2%

Andrew owns 0.175 fractional shares of a stock priced at $2000. What is the value of his investment?

• $350

• $175

• $200

• $400

If a stock is trading at $2000 and you own 0.5 shares, what is the value of your investment?

• $500

• $2000

• $1500

• $1000

What is the main advantage of owning fractional shares?

• You can own a part of expensive stocks without buying a full share

• You get more dividends

• You pay less tax

• You have more voting rights

How does the concept of fractional shares benefit investors with limited funds?

• It allows them to invest in multiple companies

• It enables them to buy expensive stocks without needing the full price

• It reduces the risk of investment

• It increases the potential returns

What is the result of multiplying the stock price by the number of shares owned?

• The total number of shares

• The total investment value

• The dividend amount

• The stock price