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The list of risks and benefits is of course much longer, but 2 examples are:
Benefit 1: there is no limit to the extent in which stock may increase in value, even in a short period of time. Risk 1: there is also no limit to the extent in which stock may DEcrease in value, even in a short period of time.
Benefit 2: stock may yield a dividend that may well surpass any level of interest you might make today on a savings account. Risk 2: the company issuing the stock may in any year decide not to pay out any dividend at all.
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Which type of stocks have the lowest risk to shareholders?
There are two types of stock: preferred stock and common stock. Preferred stock has the lowest risk to shareholders.
What is the purpose of cheap stock trading?
"Cheap stock trading" could have two meanings. The first is the trading of low-value stocks. This can be profitable, but is very high risk. The other meaning relates to discounted brokerage fees.
What are two benefits and two risks of buying stocks?
1)Price may go up or some tax reduction and no tax until selling. 2)Not cash so less temptation to spend the money Bad 1) stock price may go down 2)way over priced so it is trading more like a legal ponzi pyramid scheme (ie baseball card)
What is the stock split?
When a stock splits, one stock becomes two. People that own the stock can see the value of their stock for the company double.
How many stock exchanges are in Bangladesh?
Two, the Dhaka Stock Exchange and the Chittagong Stock Exchange.
Which type of stocks have the lowest risk to shareholders?
There are two types of stock: preferred stock and common stock. Preferred stock has the lowest risk to shareholders.
What are two major benefits and two major risk to scientific and technological advancements?
Major benefits and two major risks of scientific technological advancements
What is a stock brokerage?
A stock brokerage is the intermediary between someone selling stock and someone buying it. A stock brokerage is the middle man between stock sellers and stock buyers. They are the ones that 'broker' the deal between the two parties.
What are different ways that a risk averse person can reduce financial risk?
buying insurance! buying bonds rather than stocks and saving rather than spending- hopefully that last reason is correct but I am definately sure about the first two
Which benefits occurs first after quit smoking?
The risk of heart attack drops within a day or two.
What where two reason for poverty in the 1920s?
Stock market crash due to buying on margin and overextention of credit to buy consumer goods.
What CRM process step requires a cycle of continuous reassessment until the benefits of completing the mission outweigh the risk of not completing?
The CRM process step requires a cycle of two reassessment benefits of completing the mission. The process step is developing controls and making risk decisions.develop controls and make risk decitions
What is riskier selling a covered call option or buying a call option?
It depends on what you consider risk. A lot of people think selling a stock that cost $20 for $25 when it's trading at $27 or $28 is a risk. If you're one of them, selling the call is definitely riskier. To me, selling stock that cost you $20 for $25 means you made five bucks on the deal plus whatever the premium was, so it's all good. There are two forms of risk in buying the call. The most obvious is if the call expires out-of-the-money. If so you lose your premium. The other is this: you have to pay for calls. If you bought an Acme call with a strike price of $25 and paid a $1 premium, you need to exercise at no less than $26 to avoid losing money. If the call expires with the stock at $25.50, you lose 50 cents per share. So...if you absolutely HAVE to make as much money as you possibly can, selling the call is riskier. If not, the buyer is more at risk.
What is the purpose of cheap stock trading?
"Cheap stock trading" could have two meanings. The first is the trading of low-value stocks. This can be profitable, but is very high risk. The other meaning relates to discounted brokerage fees.
Is buying a stock and selling it within a short time frame have the same risks as short selling?
Not at all. In fact, the risk/reward profile of selling a long position are exactly opposite that of a short sale. Let's take two investors, Ann and Bruce. Ann bought a block of GM stock at $20 per share with the intent of selling it when it goes to $21. Bruce shorted a block of the same stock at $20. Ann has "limited risk and unlimited reward." If GM goes completely out of business while Ann is holding their stock, the most she can lose is $2000--$20 multiplied by the 100 shares in a block. OTOH, the stock can theoretically climb into the hundreds, so she could just make money hand over fist. It probably WON'T, but it COULD. Bruce has "limited reward and unlimited risk." If they go out of business he gets $20 per share. If the stock goes to $250 per share and the brokerage wants it back, he has a problem.
How can you measure volatility using beta?
Beta measures the volatility of a stock in relation to the overall market. A beta of 1 indicates that the stock moves with the market, a beta greater than 1 suggests the stock is more volatile than the market, and a beta less than 1 indicates the stock is less volatile than the market. Traders and investors use beta to assess the risk of a stock in comparison to the market.
What are two benefits and two risks of buying stocks?
1)Price may go up or some tax reduction and no tax until selling. 2)Not cash so less temptation to spend the money Bad 1) stock price may go down 2)way over priced so it is trading more like a legal ponzi pyramid scheme (ie baseball card)
