Answer:
Explanation:
When you own stock, you own a part of
the company. There are no guarantees of profits,
or even that you will get your original investment
back, but you might make money in two ways.
First, the price of the stock can rise if the
company does well and other investors want to
buy the stock. If a stock’s price rises from $10 to
$12, the $2 increase is called a capital gain or
appreciation. Second, a company sometimes pays
out a part of its profits to stockholders—that’s
called a dividend. If the company doesn’t do
well, or falls out of favor with investors, your
stock can fall in price, and the company can stop
paying dividends, or make them smaller.
