Financial Operations Investing/SMG Rules Review | 100% Correct Answers

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What is a stock exchange? - ✔✔a place (physical or virtual) where stocks are traded by brokers who represent buyers and sellers How are stocks of well-known companies classified? - ✔✔blue-ch... ip Common stock - ✔✔gives investors a basic share of ownership in the company as well as voting rights Preferred stock - ✔✔gives stockholders a basic share of ownership in the company and stockholders are entitled to fixed dividends but are not entitled to voting rights What is a bull market? - ✔✔a market in which share prices are rising, encouraging buying. What is a bear market? - ✔✔a market in which prices are falling, encouraging selling. Advantages of investing in mutual funds - ✔✔diversification of your portfolio, professional money management, fairly simple to trade and provide you with easy access to your money because you can cash out of them at any time (liquidity), minimal risk, Disadvantages of investing in mutual funds - ✔✔they cost money to manage and you are required to pay taxes on your gains Advantages of issuing bonds - ✔✔company owners retain ownership, interest paid on bonds is fixed and predetermined, interest paid to bondholders is tax-deductable for the issuer Disadvantages of issuing bonds [Show More]

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