ASSESSMENT: Stocks

Select the best answer: One “share of stock” represents

• how much profit you will earn.

• part ownership of a company.

• the actual value of the stock.

• an investment

Which statement is true about common stock:

• Most companies issue common stock not preferred stock.

• Common stock gives you the right to vote at shareholders’ meetings.

• You have the right to receive dividends.

• You don't get to vote.

If a company pays a quarterly dividend of 25 cents, what would be the dividend rate?

• 25 cents

• 50 cents

• 75 cents

• $1.00

A company may need to issue stock in order to raise money to

• expand business.

• develop new products.

• lower debt.

• sell stock.

Where is most stock bought and sold?

• by the company.

• by the government.

• in a stock market or exchange.

• online.

A stockbroker

• is the owner of the company.

• may provide clients advice on stocks and help them make trades.

• is not allowed to sell or buy stocks.

• collects debt.

The price of a stock is determined by the

• actual value of the company.

• supply and demand for the stock.

• government.

• shareholders.

Stock investors can profit from stocks from

• bankruptcy.

• dividends.

• growth.

• both dividends and growth.

The more shares you own of a company the more you own of the company.

• True

• False

The lower the dividend yield, the better return for the shareholder.

• True

• False