What is a Stock?

A stock is a financial instrument that represents the ownership of a fraction of a company.  

Understanding Stocks

Companies sell stock to raise funds. They decide on the number of shares of their stock they want to issue. These so called outstanding shares are traded at an exchange, such as the Nasdaq.

Types

There are several types of stock

• Common Stock
  Gives shareholders voting rights on certain decisions.
• Preferred Stock
  Gives shareholders no voting rights on decisions, but a higher claim on earnings and assets.

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