Considering Stock Types When Creating Business Plans


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question 1 of 3

Which is a characteristic of common stock?

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1. Why might an investor purchase preferred stock?

2. Stock warrants _____.

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About This Quiz & Worksheet

What is meant by terms such as common stock, preferred stock and stock warrant? You will be tested on your familiarity regarding the details of these terms and other relevant information about stocks when you use this quiz/worksheet to assess your knowledge of this topic.

Quiz & Worksheet Goals

Questions contained in this self-assessment tool address:

  • Common stock characteristics
  • Why investors would choose preferred stock
  • What stock warrant means
  • Characteristics of stock options
  • Legislation pertaining to stock issuing by privately held companies

Skills Practiced

  • Distinguishing differences - compare and contrast common stock and preferred stock
  • Defining key concepts - ensure that you can accurately define main terms and phrases, such as stock warrant
  • Information recall - access the knowledge you've gained regarding legislation addressing the regulation of stocks
  • Knowledge application - use your knowledge about the reasons for purchasing preferred stock

Additional Learning

Once you have completed your assessment and feel that you need to further review this topic, you can do so by accessing the lesson titled Considering Stock Types When Creating Business Plans. This lesson will provide you with information such as:

  • What a business plan is and financing options for new companies
  • The benefits and drawbacks of common stock
  • How preferred stock differs from common stock
  • Examples and definitions of stock warrants and stock options
  • The federal regulation of stock offerings