Question

Q 11.31: Tabitha and Gerald are discussing common stock that they hold. Tabitha states that she purchased hers through the New York Stock Exchange, but Gerald says that he purchased his by investing in his brother-in-law’s company. What is the difference between the investments of Tabitha and Gerald?

Answer 1

Answer:

Tabitha's stocks are from a publicly held corporation but Gerald's is from a privately held corporation

Explanation:

The main difference between Tabitha's and Gerald's investment seems to be the fact that Tabitha's stocks are from a publicly held corporation but Gerald's is from a privately held corporation. Public held corporation's stocks/shares can be bought by anyone on a stock exchange. On the other hand Privately held corporation's stocks/shares are only sold by the company to a select few investors. Which Gerald managed to buy solely because it is his brother-in-law's company.