ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A stockholder owns a part of a company.
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Depending upon the current market price, stockholders may pay different prices for the same stock.
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A stockholder may or may not receive a dividend.
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A stockholder will always receive a profit when the stock is sold.
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Detailed explanation-1: -The correct answer is stock will not be issued directly.
Detailed explanation-2: -The stock market’s average return is a cool 10% annually-better than you can find in a bank account or bonds. But many investors fail to earn that 10%, simply because they don’t stay invested long enough. They often move in and out of the stock market at the worst possible times, missing out on annual returns.
Detailed explanation-3: -Here are some of them: Capital appreciation, which occurs when a stock rises in price. Dividend payments, which come when the company distributes some of its earnings to stockholders. Ability to vote shares and influence the company.
Detailed explanation-4: -There are no guarantees of profits, or even that you will get your original investment back, but you might make money in two ways. First, the price of the stock can rise if the company does well and other investors want to buy the stock.