Saint Columban College
College of Business Education
Pagadian City
Financial Markets Course
Name: Buray, Arian G. Course & Year: BSA 2
Work #6- Discussion Questions
Below are frequently asked questions in the stock market. Answer briefly.
1. What are stocks?
Answer: Stocks are security that represents the ownership of a fraction of the issuing
corporation or a publicly traded company. Stocks are also known as equity, in which as a
part owner, you will become part of the company's growth and may also lose if the
company suffers a loss.
2. What is a stock market?
Answer: A stock market is a place or venue where stocks are bought and sold or where
buyers and sellers meet to exchange equity shares of public corporations.
3. Why invest in stocks?
Answer: The primary reason why people invest in stocks is the potential return that they
will receive or get from their investments and because stocks offer higher yields or
returns compared with fixed income instruments such as time deposits, government
securities and bonds.
4. How do you make your money grow in the stock market?
Answer: The best way to make money grow in the stock market is to put it in high
quality stocks for long periods of time while harnessing dividend income and capital
appreciation. Investors who buy into the company at a low market price and sell it at a
higher price will gain capital appreciation.
5. How do you start investing in stocks?
Answer: Just like an ordinary savings account, an investor has to open an account and
present valid identification with a broker before he can actively trade stocks on the
Exchange. There is a simple process in starting in the stock market. The first thing to do
is to choose your stockbroker. Second, open a trading account with your stockbroker of
choice. Then, place your buy or sell order either by online or through a phone call to your
stockholder. And, monitor and keep track of your investments.
6. Is there any risk involved in investing?
Answer: Risk is always a part of any investment as we know that uncertainty is a
permanent feature of the investing perspective. It is better that we know how to limit and
manage risk. A minimum level of gain or loss and calculated decisions should be set.
7. What is the minimum amount of initial investment in stocks?
Answer: The minimum amount of money needed to invest in the stock market depends
on the minimum number of shares to be traded for the stock and the minimum amount
required to open a trading account. The minimum number of shares that can be traded
will be determined by the prevailing market price of a particular stock. The PSE has a
Board Lot table which shows the minimum number of shares that can be bought or sold
given a certain price range.
8. How to choose a stockbroker and what are the client’s obligations to the stockbroker?
Answer: There are over 100 licensed stockbrokers accredited by the Philippine Stock
Exchange which are classified into traditional and online. And your choice should depend
on the type of service that you need. The client's obligations to the stockbroker are to
always update their personal information such as, address, contact numbers and email
address, and to always settle their buying transactions on the settlement date.
9. What are the broker’s obligations to its clients?
Answer: The broker's obligations to its clients are to confirm their securities transaction
after trading hours, buying/selling invoices must be delivered to the client on T+1
(transaction day plus one day), stockbroker must send the client’s statement of account on
a monthly basis, and stockbroker must send his/her client's information and
correspondences relevant to its investment.
