Friday, February 1, 2008

* What exactly is a stock and why do companies sell stock in the first place?
A share of ownership in a company. Owners of stock receive part of the company's profits-or bear some of its losses-up to the amount of money they put into the stock.
Companies sell stock to invest more money into their business so they can create new projects.

* What is the difference between a public and a private company?
Public company are owned by many investors while the shares of a private company are owned by relatively few shareholders.
Private companies don’t have to sell stocks

* What is the Dow Jones Industrial Average?
The Dow Jones Industrial Average is an index of thirty, blue chip stocks that are traded in the United States.

* What is a blue chip stock?
A blue chip stock is the stock of a well established company having stable earnings and no extensive liabilities.
Wal-Mart, Coca-Cola, Gillette, Berkshire Hathaway and Exxon-Mobile are examples of Blue Chip Stock.


* What is the New York Stock Exchange and the NASDAQ?
The New York Stock Exchange is the largest stock exchange in the World. It located in the New York City. This stock exchange carries American stocks of well established companies.
The National Association of Securities Dealers Automated Quotations is the largest stock exchange in New York. They
trade through an automated network.


*What is a mutual fund?
Mutual Funds is where investors pool together money to improve their investments with stocks.


*What are some of the biggest companies on the stock market, how much is their stock?
Walmart, Citigroup, Exxon Mobil Crop and many more.


*What is the PE ratio of a stock?
PE ratio is a measure of the price paid for a share relative to the income or profit earned by the firm per share.


*What is a stock dividend?
A stock dividend is a share of stock that represents the share's portion of the company's profits, generally dispersed yearly.

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