If you were investing in the stock market today, how would your decisions be affected based on what you learned over the years? If you already invest in the stock market, will you start doing anything differently?

In a few sentences, answer the following question as completely as you can. You are discussing stock valuation techniques with your broker. You mention that your Finance professor stated that “a stock that will never pay a dividend is valueless.” Your broker says this is not true because  you can always sell the stock to someone else (thus, a capital gain is possible) a share of stock represents a share of ownership in something tangible (i.e., the issuing firm).Argue for or against your broker’s position.

People who own stock are called STOCKHOLDERS, and they ______________________     must be paid dividends.     hope to be paid dividends.     must be paid interest.     hope to be paid interest

The more you have invested in a stock, the more likely you are to be interested in monitoring the company's management to ensure they are maximizing shareholder wealth.   Question 28 options:   True   False

Making a choice would you rather invest in stocks or bonds? Why?

Will the stock market Crash again? yes or no? why?

Despite some theoretical assertions, many investors do care a great deal about dividends. They believe that sure dividends today (a bird in the hand) are less risky than a return in the form of capital gains in the future.   The following table lists some factors that might affect an investor’s preference for dividends. Indicate whether the given factors are likely to make an investor prefer to receive more or fewer dividends for each statement.         When an investor dies, his or her heirs are not liable for taxes on the capital gains generated during the investor’s life. They are only liable for the capital gains earned since the investor’s death.       Risk-averse investors prefer to minimize uncertainty with their expectations of income from their investment.       Investors expect a reliable annual cash flow from their stock portfolios.

In order to achieve your savings goal for retirement, do you believe it is better to focus your investments in stocks, in bonds, or both?  Why?  Be sure to address the issues of interest versus capital gains, as well as the issue of risk.