Intro. to the Stock Market

1. What exactly is a stock and why do companies sell stock in the first place?
A stock market is a private or public for the trading of company stock and derivatives of
company stock at an agreed price.

2. What is the difference between a public and a private company?
The difference between public and private company is that public can buy stocks from a public company.

3. What is the Dow Jones Industrial Average?
The Dow Jones Industiral Average is the average index of the US stock market.

4. What is a blue chip stock?
A "blue chip" is the nickname for a stock that is thought to be safe, in excellent financial shape and firmly entrenched as a leader in its field.

5. What is the New York Stock Exchange and the NASDAQ?
New York Stock Exchange is a stock exchange based in New York City, New York and NASDAQ is NASDAQ is an American stock exchange. It is the largest electronic screen-based equity securities trading market in the United States.

6. What is a mutual fund and how do they operate?
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis.

7. What are some of the biggest companies on the stock market, what is the total value of their stock?
PetroChina-$546.14 billion
Lehman Brothers Holdings - 691.06 billions.
General Electric-$$330.93 billion
Washington Mutual - 327.91 billions.
ExxonMobil-$465.51 billion
General Electric-$$330.93 billion
and many more

8. What is the PE ratio of a stock?
PE ratio = Price per share / Annual earnings per share.

9. What is a stock dividend?
Dividend is the payment that is made by a company to its shareholder.