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Actually the riskier the stock the larger the discount rather than a premium. The riskier a stock is the more likely it is that you could loose everything you have invested. It all comes down to the risk reward analysis. Investors must determine if the potential loss of a substantial amount of their investment is worth the reward if things work out in their favor. This determination will be based on each individuals risk tolerance. The riskier the stock becomes the less people will be willing to invest and it begins to effect the stock price resulting in that particular security trading at a discount to the market. Stocks with large potential can sell at a premium in the hopes that the potential will be realized. But, this is entirely different than a premium given based on the amount of risk. As percieved risk becomes greater stock prices decline.
What else can I help you with?
Why are stocks and bonds sold?
The stocks and bonds are sold by the companies are due appreciation of capital funds to meet the additional requirments of companies.
Can stocks be purchased after closing?
No. Stocks cannot be purchased/sold once the exchange closes.
Where is a place where stocks are bought and sold?
exchange
What was the place where stocks were bought and sold called?
A stock market
How is the option premium taxed?
The option premium is taxed as a capital gain when the option is sold or expires.
Which of these are bonds sold above face value?
premium
How is a estate distributed with stocks?
The stocks will have to be valued as of a specific date, which the executor has some ability to choose. The stocks are then sold and the amount is distributed. The stock ownership may be transferred as well.
Are Stocks cash income even if they are not liquidated?
Stocks are not cash or income, they are an asset. Once they are sold, the value is "realized" in terms of income.
Who is a person that shares in a company often sold to raise money for the company?
Stocks
How are most stocks and sold?
Most investors purchase stock markets(or exchanges)
What are call options?
Call options are contracts that allow the buyer to buy the stock at a specified price within a specific time period. A singular contract gives the owner the right to purchase 100 shares of that stock at a premium. The way most option owners make money is through an increase of that premium as the stock increases in value. The contract can either be sold for that increased premium or be exchanged for 100 shares of that stock at its original value.
What are some benefits of buying premium bonds?
Premium bonds offer higher interest rates than bonds sold at par. However, there is a premium cost that one must pay. Don't let that deter you, as the extra interest should more than pay the premium when the bond reaches maturity. The other benefit of Premium bonds is that they are less volatile than par bonds.
