Introduction to Stock Investing

What is a stock?

• A share of ownership in a company

• A loan given to a company

• A type of bond

• A government-issued security

How can shareholders earn money from stocks?

• By selling company assets

• Through government subsidies

• By demanding money from the company

• Through price appreciation and dividends

Why do companies sell shares?

• To increase employee salaries

• To avoid paying taxes

• To raise money for expansion

• To reduce company size

What determines stock prices after the IPO?

• Company's age

• Government regulations

• Supply and demand

• Company's financial metrics only

What is the role of a brokerage?

• To help investors buy and sell shares

• To provide loans to companies

• To manufacture stocks

• To set stock prices

What is a stock exchange?

• A place where stocks are manufactured

• A market where shares are traded

• A government office for stock regulation

• A type of mutual fund

What is the Dow Jones Industrial Average?

• A brokerage firm

• A stock index

• A type of stock

• A government agency

Why are stocks considered a long-term investment?

• Because they have fixed returns

• Due to their historical performance and variability

• Because they are risk-free

• Due to government regulations

What is a mutual fund?

• A personal savings account

• A government bond

• A type of stock

• A company that pools money to invest in securities

What should investors consider when choosing mutual funds?

• The fund's fees and objectives

• The fund's age

• The fund's location

• The fund's color