Understanding Stocks and Dividends

What is one primary way to earn money from stocks?

• Through stock appreciation

• By holding them indefinitely

• By buying them from a private seller

• By selling them at a lower price

How does increased demand affect stock prices?

• It decreases the stock prices

• It has no effect on stock prices

• It increases the stock prices

• It stabilizes the stock prices

What analogy is used to explain supply and demand in the context of stocks?

• Trading a baseball card

• Selling a car

• Bidding on a painting

• Auctioning a house

What are dividends?

• Payments made to shareholders from company profits

• Fees paid to brokers for stock transactions

• Taxes on stock earnings

• Interest earned on stock investments

Why might a company choose to pay dividends?

• To entice people to buy and hold their stocks

• To encourage shareholders to sell their stocks

• To reduce their profits

• To increase the number of stocks available