Intoduction to the Stock Market

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

- A stock is a part ownership of a company. They sell stocks to make more money.

• What is the difference between a public and a private company?

- A private company approaches you or invites you to buy a stock. A public company allows anyone in the public to purchase a stock.

• What is the Dow Jones Industrial Average?

- The Dow Jones Industrial Average simple average value of thirty large industrial stocks.

• What is a blue chip stock?

- A blue chip stock is stock of a well established and financially sound company that has demonstrated its ability to pay dividends in good and bad times.

• What is the New York Stock Exchange and the NASDAQ?

- The New York Stock Exchange is the largest stock exchange in the world. NASDAQ is the largest electronic screen-based equity securities trading market.

• What is a mutual fund?

- A mutual fund is a financial intermediary which allows a group of investors to pool their money together with a predetermined investment objective.

• What are some of the biggest companies on the stock market, how much is their stock?

- Microsoft ($28.12), Google (504.14), Apple ($122.14) , etc...

• What is the PE ratio of a stock?

-It's the ratio of a company's share price to its pre-sharing earnings.

• What is a stock dividend?

-It's a dividend paid as additional shares of stock rather than money.