Stock Investing: What is a Share?

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What is the main reason a company divides itself into multiple shares?

To raise funds from multiple investors instead of a few (correct)

To make it easier for a few individuals to buy the entire company

To increase the number of shareholders in the company

To make the company more complex

If a company divides itself into 1 crore shares, what fraction of the total company value does each share represent?

1/1,000 of the total company value

1/100,000 of the total company value

1/1,000,000 of the total company value

1/10,000,000 of the total company value (correct)

Which of the following is NOT a reason a company might have thousands or even lakhs/crores of shares?

To increase the complexity of the company's ownership structure (correct)

To represent smaller fractions of the total company value

To raise a large amount of funds from multiple investors

To make it easier for individuals to invest in the company

If a company has divided itself into 100 shares, what percentage of the total company value does each share represent?

1% Signup and view all the answers

Which of the following is NOT a likely reason an individual investor might own a large chunk of a company's shares (e.g. in the lakhs)?

They want to make the company more complex Signup and view all the answers

Which of the following is the most accurate description of how a company's shares are typically divided and sold?

The company divides itself into thousands or millions of small shares and sells them to many individual investors Signup and view all the answers

What does the market capitalization of a company essentially mean?

The total value of the company's shares outstanding Signup and view all the answers

Which of the following is a characteristic of large-cap companies?

They have a market capitalization of more than $10 billion Signup and view all the answers

How do stock indices like SENSEX and NIFTY represent the overall health of the stock market?

They include a basket of stocks that represent the largest companies in India Signup and view all the answers

Which of the following is a characteristic of small-cap companies?

They have a market capitalization of less than $2 billion Signup and view all the answers

Which of the following is a characteristic of mid-cap companies?

They are typically more stable and less risky investments Signup and view all the answers

What is the key difference between investing in individual stocks and investing in a stock index?

Investing in individual stocks allows you to capitalize on the performance of a single company, while investing in a stock index provides exposure to a broader market Signup and view all the answers

What is the market capitalization range for large-cap companies?

Greater than Rs. 1,000 crores Signup and view all the answers

Which of the following is an example of a mid-cap company?

TCI Express Signup and view all the answers

What is the market capitalization range for small-cap companies?

Less than Rs. 1,000 crores Signup and view all the answers

Which of the following statements about small-cap companies is true?

They have a relatively higher risk and lower liquidity compared to large-cap companies. Signup and view all the answers

Which of the following is an example of a large-cap company?

Reliance Industries Signup and view all the answers

What is the primary factor used to categorize companies as large-cap, mid-cap, or small-cap?

Market capitalization Signup and view all the answers

Stock Investing: What is a Share?

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