Tuesday, February 9, 2010

What exactly is a stock and why do companies sell stock in the first place?
Stock represents partial ownership of a corporation,
it serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors. When you buy shares of a stock, the company gives you a stock certificate which shows that you own a small fraction of that company.

What is the difference between a public and a private company?
A public company is a company that has permission to offer its registered securities for sale to the general public. A private company, however, is a company owned by non-governmental organizations.

What is the Dow Jones industrial average?
The Dow Jones Industrial Average is one of the several stock market indices in America to measure a section of the stock market.

What is a blue chip stock?
A blue chip stock is the stock of a well-established company having balanced incomes and no extensive liabilities. They pay regular dividends even during economic meltdowns.

What is the NYSE and NASDAQ?
The New York Stock Exchange (NYSE) and NASDAQ are two Stock exchanges that both serve an important role in the stock market, their job is to provide assistance to stock brokers and traders in trading stocks and other securities.

What is a mutual fund?
A mutual fund is a pro-managed type of investment plan that pools money from many investors and invests in stocks, bonds, and/or other securities.

What are some of the biggest companies on the stock market (in total value of their stock)?
Activision/Blizzard ($12,808.7 Million)

Electronic Arts, inc. ($5,246.7 Million)

Sony Corporation ($3,382.6 Million)


What is a stock dividend?
A Stock Dividend is payment made by a company or corporation to its shareholder members. When the corp. earns a profit or surplus, it can either be re-invested in the business (known as retained earnings), or be paid to the shareholders as a dividend.



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