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Since for Every Buyer of a Stock There Is a Seller

question 169

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Since for every buyer of a stock there is a seller of that stock, someone can likely become very rich acting on public information.

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Definitions:

Issue Price

The price at which new securities are offered to the public by an issuer.

Present Value

Today's value of a future financial sum or series of payments, calculated with a certain return rate.

Market Rate

The current price or interest rate of goods, services, or securities in the marketplace, determined by supply and demand forces.

Premium

A premium refers to the amount paid for buying insurance or the amount paid over the face value of bonds.

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