Stock Types and Exchanges

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Questions and Answers

Which type of stock has a larger market value and trading volume?

  • Preferred shares
  • Equities
  • Both have the same market value and trading volume
  • Common shares (correct)

Where do existing shareholders transact with potential buyers?

  • Stock exchanges
  • Corporations
  • Primary markets
  • Secondary markets (correct)

Do corporations listed on stock markets commonly buy and sell their shares?

  • Yes, but only through stock buybacks (correct)
  • Yes, they frequently buy and sell their shares
  • No, they never buy and sell their shares
  • No, but they issue new shares

Why do companies issue shares?

<p>To generate revenue through selling shares (A)</p> Signup and view all the answers

What resources require significant amounts of capital for a company?

<p>All of the above (D)</p> Signup and view all the answers

Which type of financing can be challenging for a startup due to the lack of assets to pledge?

<p>Debt financing (A)</p> Signup and view all the answers

What is the most common way to set prices of shares on a stock market?

<p>An auction process (D)</p> Signup and view all the answers

What is a bid in the context of stock trading?

<p>The price at which somebody wishes to buy (A)</p> Signup and view all the answers

What advantage does a company gain from having publicly tradable shares?

<p>Ability to attract talented employees (D)</p> Signup and view all the answers

How can listed shares be used by a company?

<p>To raise additional funds by issuing more shares (B)</p> Signup and view all the answers

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