Introduction To Stock Market

• What exactly is a stock and why do companies sell stock in the first place?
• A stock is a share of ownership in a company.
  
• Companies sell stocks to allow people with interest in buying a company to own shares of the company because they don't have enough money to buy the entire company.
  
• What is the difference between a public and a private company?
• A public company sells shares to the public whereas a private company cannot sell shares to the public.
  
• What is the Dow Jones Industrial Average?
• The Dow Jones Industrial Average is the price-weighted average of 30 actively traded blue chip stocks on the New York Stock Exchange (NYSE)
• What is a blue chip stock?
• A blue chip stock is a shares of generally large companies that have a history of strong earnings growth and dividend payments.
• What is the New York Stock Exchange and the NASDAQ?
• The New York Stock Exchane is the largest organized securities market in the United States, founded in 1792.
• NASDAQ stands for the National Association of Securities Dealers Automated Quotation System
• What is a mutual fund?
• Mutual funds are pools of money that are managed by an investment company.
• What are some of the biggest companies on the stock market, how much is their stock?
• Microsoft, Intel, E*Trade Financial, Cisco, etc.
  
• What is the PE ratio of a stock?
• A ratio used by some investors to gauge the relative value of a security in light of current market conditions. Ratio = Market Price divided by Earnings per Share.
• What is a stock dividend?
• A stock dividend is paid to shareholders in shares of stock rather than cash.