What Are Stocks?

  • Stocks represent shares of ownership in a company.

  • When you own stock, you become a shareholder, which means you have a stake in the company’s success.

  • Companies issue stock to raise funds for their operations and growth.

Types of Stocks:

  1. Common Stock:

    • Most common type of stock.

    • Shareholders have voting rights and can participate in company decisions.

    • Receive dividends (if declared by the company).

  2. Preferred Stock:

    • Holders receive fixed dividends before common shareholders.

    • Usually no voting rights.

    • Considered a hybrid between stocks and bonds.

How Stocks Work:

  • Stocks are listed on stock exchanges (e.g., NYSE, NASDAQ).

  • Exchanges track supply, demand, and prices of each stock.

  • Buyers and sellers trade stocks through these exchanges.

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