Stocks and Bonds Basics

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PrincipledPinkTourmaline
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6 Questions

What type of stockholders have voting rights?

Common stockholders

Which type of stockholders receive preference in dividends and bankruptcy situations?

Preferred stockholders

Who becomes a creditor of the company when purchasing a bond?

Bondholders

Where does the trading of stocks take place?

Stock market

What represents a promise from a company to pay the face amount to the bond owner at a future date?

Bond

Who receives a commission for the services of both buying and selling stocks?

Stockbrokers

Study Notes

Stockholders and Bondholders

  • Common stockholders have voting rights, allowing them to participate in company decisions.
  • Preferred stockholders have preference in dividends and bankruptcy situations, receiving payments before common stockholders.

Bond Ownership

  • Bondholders become creditors of the company, essentially lending money to the corporation.

Trading Platforms

  • Stocks are traded on stock exchanges, such as the New York Stock Exchange (NYSE) or NASDAQ.

Bonds and Dividends

  • A bond represents a promise from a company to pay the face amount to the bond owner at a future date, along with interest earned.

Brokerage Services

  • A broker receives a commission for facilitating both buying and selling of stocks, earning a fee for their services.

Test your knowledge of stocks and bonds with this quiz covering the basics of ownership shares, stock types, and rights of stockholders. Learn about common stock, preferred stock, and their respective features in this quiz.

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