Stocks

Stocks, in the financial context, represent a form of participation or ownership in a company. When a company decides to finance itself by issuing a stock, it is offering the public the chance to buy a share in the company.

Shares represent a fraction of a company’s share capital, so the holder:

Has the right to participate in company decisions
Benefits directly from the company’s profits through the distribution of proportional dividends and through the appreciation of shares
Shares the financial risk of the company. If the company suffers losses, the value of the shares may decrease

Correlated words

Financial Instrument

A Financial Instrument is a tool or asset used in financial markets for investment, trading, or funding activities, like stocks or bonds.

Purchasing power

Purchasing power refers to the quantity and quality of goods and services that can be acquired with a given amount of money.

Bonds

Bonds are debt securities issued by governments or institutions to raise funds for various financial purposes.

Deficit

A Deficit in economics signifies a situation where expenses exceed revenues, resulting in a state of financial loss.

Default

Default occurs when an entity fails to meet its debt obligations, potentially leading to bankruptcy or other financial repercussions.

CPI

The Consumer Price Index (CPI) is the principal measure used to track inflation, reflecting the average price change over time.

Capital

Capital refers to funds or assets for investment or economic activities crucial for business growth and development.

Capital gain

Capital gain is the profit earned from selling an asset at a higher price than its purchase cost, commonly realised in stock markets.

Commercial Bank

Commercial Banks cater to individuals and small businesses, offering deposit accounts, loans, and other traditional banking services.

Central Bank

The Central Bank sits atop the banking hierarchy, working with the government to regulate monetary policy and currency issuance.