A share market is a risk spreading mechanis as well as a financing one. Firms sell shares to the public, and using this money, they undertake various projects. In return, the buyers of these shares can share in the profit of the firm, in the form of dividends. Also, shares may appreciate (or depreciate) and when a share is sold, the shareholder can realise a profit in terms of capital gains. When one buys a share, he owns a "fraction/share" of a company, and thus has a claim on a "fraction/share" of the profit made by that compay..
Shares are usually bought and sold on a stock exchange, through a stock broker, who interacts between the seller and the buyer. However, shares can also be purchased through electronic means, such as electronic stock brokers.
Return is determined by the risk of company. Risk means a deviation from an expected outcome. Thus, if you have a positive outcome, such a increased demand for a product, or the firm makes large profits, your share value rises. For negative outcomes it falls.
Stocks are a sure, yet risky way to make money.
The South African market made a average return of 37% in 2006, whereas the Chinese average 98% or so!!!
2007-03-11 09:53:01
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answer #2
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answered by K S 1
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share market is a place shares of company are traded. you should understand what is share ? share is ownership of the company to the extent of face value of a share. if u are holding 100 shares of rs10/each ie you are holding ownership of the company to the extent of 1000/ rs in share market this Owner ship is traded share price is determined by so many factors like performance of company, economic condition of the country etc is a speculative market, normally market price of the share is higher or lower than its face value . I hope this will give you some idea of share market
2007-03-12 00:19:42
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answer #3
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answered by bora_nc 2
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