Wednesday, February 11, 2009

Intro. to the Stock Market

1) What exactly is a stock and why do companies sell stock in the first place?

A stock is a security that shows ownership in a publicly traded company and is sold by the share. they typically have a monetary interest in the company.The job of management is to produce gains for the shareholders. Although a manager has little or no control of share price in the short run, poor stock performance could, over the long run, be attributed to mismanagement of the company.Another main role of the stock market is to act as a barometer for financial health.

2)What is the difference between a public and a private company?

The different between a public and a private company is that a public company is one whose stock is traded by the public, e.g., listed on an exchange such as the New York Stock Exchange or NASDAQ. A private company is one whose stock is generally held by one shareholder or a small group of shareholders.

3)What is the Dow Jones Industrial Average?
The Dow Jones Industrial Average is simply the average value of 30 large, industrial stocks. Big companies like General Motors, Goodyear, IBM and Exxon are the kinds of companies that make up this index.

4)What is a blue chip stock?

a common stock of a nationally known company whose value and dividends are reliable.

5)What is the New York Stock Exchange and the NASDAQ?

they trade stocks of the public companies.

6)What is a mutual fund and how do they operate?
mutual fund is a company that collects money form individuals who are interested in buying stokes and the company invests the money stokes on their behalf.

7)What are some of the biggest companies on the stock market, what is the total value of their stock?

8)What is the PE ratio of a stock?

This article tells you about the P/E ratio of a stock and how to use the vause and what the P/E ratio tells you about the stock in fundamnetal analysis!

9)What is a stock dividend?

a dividend paid in stock rather than in cash.