Problem 26

Introduction

A stock (sometimes referred to as equity) is a financial instrument that represents ownership of a portion of a company's capital. A stockholder's share of the company's resources and earnings is determined by the number of shares they possess. The fractions of stock that make up a firm are referred to as "shares." Many economic agents’ portfolios include stocks, which are normally purchased and sold on stock exchanges, though private trades are permitted as well. These transactions must abide by federal restrictions intended to protect investors from deception. Most other long-term investments have underperformed them regularly.