Problem 13

Introduction

A stock (sometimes called equity) is a financial instrument that represents ownership of a share of a business. This gives stockholders a share of the company's resources and earnings based on the number of shares they own. The subdivisions of stock are called "shares." Stocks are a staple of many economic agents' portfolios, and they're typically bought and sold on stock markets, though private trades are allowed as well. These transactions must adhere to federal regulations designed to protect investors from misleading practices. Most other long-term investments have consistently underperformed them.