Financial Engineering: Introduction to Stocks and Equities
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Questions and Answers

What is the primary purpose of companies issuing stocks?

  • To raise capital to finance their business (correct)
  • To hire more employees
  • To increase the company's market value
  • To distribute profits to shareholders
  • What is the term used to differentiate trading stocks from stock futures, options, and other derivatives?

  • Cash Equities (correct)
  • Equities
  • Common Stock
  • Stock Futures
  • What is the benefit of the 'corporate concept' to private individuals?

  • It allows them to own 100% of a company
  • It allows them to become a CEO of a company
  • It allows them to trade stocks on the stock exchange
  • It allows them to pool their resources together for mutual benefit and profit (correct)
  • What is the definition of equities in the context of finance?

    <p>Fractional ownership in a company</p> Signup and view all the answers

    In the context of stocks, what is the difference between 'stocks' and 'common stock'?

    <p>Common stock is a type of stock that is not preferred stock</p> Signup and view all the answers

    What is the primary benefit of stocks compared to bonds?

    <p>Higher 'upside' potential</p> Signup and view all the answers

    What is the name of the court case that established the concept of corporate personhood in the United States?

    <p>Citizens United v. Federal Election Commission</p> Signup and view all the answers

    What is the primary goal of a company filing for Chapter 11 bankruptcy?

    <p>To restructure debts and continue operations</p> Signup and view all the answers

    What is the name of the Dutch company that was established in 1602 and granted a monopoly on Dutch trade with Asia?

    <p>Dutch East India Company</p> Signup and view all the answers

    What is the primary benefit of limited liability for shareholders?

    <p>Protection from personal financial losses</p> Signup and view all the answers

    What is the name of the stage of corporate funding where a company raises capital from friends and family?

    <p>Angel Investing</p> Signup and view all the answers

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