ECON Lesson 3.4: Corporations and The Stock Market
True or False: Investors in the stock market are always guaranteed they will earn a profit
False
What is an external factor that would cause a positive change to the stock market?
Multinational peace agreement being signed
What are some external factors would cause a negative change to the stock market?
Natural disaster, labor strike, terrorist attack
Franchise
a fee in exchange for the right to use a parent companies name, business model, and products
Stocks
also known as shares that are sold to raise capital
McDonald's
an example of a franchise
Multinational corporations
companies that operate in multiple countries
When investors receive profits from companies, this is known as:
dividends
Charter
government document that gives permission to start a corporation
Stockholder
individuals who purchase shares of a company
Corporation
legally recognized as a separate legal entity that has all the rights of a person or sole propietor
Buying partial ownership in a corporation is identified as:
stocks
Franchisee
the person who pays a fee in exchange for the right to use a parent companies name, business model, and products
Franchisor
the person who sells the rights of a franchise
If a business is under-performing and the stocks, or shares in that business, decrease in value, the market is called:
Bear market
Bonds are different than stocks in that bonds:
Bonds are loans, while stocks you own
When the stock market is doing well and the value of stocks, or shares in a business, increase, this is known as:
Bull market
Paying a percentage of the purchase price and then borrowing the rest of the money is known as:
Buying on margin
Dividend
portion of the companies earnings given to investors