Fractional Share

    graph TD;
	    A[Full Share]-->B[Stock Split]
	    A-->C[Dividend Reinvestment]
	    A-->D[Mergers & Acquisitions]
	    B-->E[0.5 Share]
	    C-->F[0.25 Share]
	    D-->G[0.3 Share]

## What defines a fractional share? - [x] A part of a share that is less than one full share - [ ] A share that is greater than one full share - [ ] A share that has been split into two - [ ] Any type of investment > **Explanation:** A fractional share is specifically defined as being less than one full share. ## How are fractional shares commonly created? - [ ] By investors buying only part of the stock - [x] Through stock splits or mergers and acquisitions - [ ] By national governments giving shares to the general public - [ ] Through selling shares at a discount > **Explanation:** Stock splits and mergers/combinations often result in fractional shares. ## Can fractional shares be traded on the open market? - [x] No, they usually cannot be traded directly - [ ] Yes, just like regular shares - [ ] Only during special market hours - [ ] Only for stocks under $1 > **Explanation:** Fractional shares often aren't traded in the open market; selling typically happens through brokerage services. ## If a company announces a 3-for-1 stock split, what do you get if you had 2 fractional shares? - [ ] 5 fractional shares - [x] 6 fractional shares - [ ] 1 whole share - [ ] Nothing > **Explanation:** 2 fractional shares multiplied by 3 equals 6 fractions of a share; everyone loves more pizza! ## What is a benefit of owning fractional shares? - [ ] Unlimited voting rights - [ ] Access to exclusive shareholder meetings - [x] Lower barrier to entry for investing - [ ] Ability to sell to anyone > **Explanation:** Fractional shares lower the investment barrier, allowing for a wider investor base! ## If I invest using a Dividend Reinvestment Plan (DRIP), what might result? - [x] Fractional shares might be accumulated - [ ] Full shares only, no fractions - [ ] Only new assets in another company - [ ] No effect whatsoever > **Explanation:** DRIPs often lead to acquiring fractional shares since dividends can purchase partial units of shares. ## Is it common to end up with fractional shares after an acquisition? - [x] Yes, it often happens based on the conversion ratio - [ ] No, acquisitions always round to whole shares - [ ] It only happens if the owner is lucky - [ ] Rarely, only if it's a popular tech company > **Explanation:** Fractional shares frequently result from corporate actions like acquisitions and mergers. ## What's the best way to handle fractional shares if you want to sell? - [ ] Walk into a physical store - [x] Use a brokerage that supports trading of fractional shares - [ ] Post them on social media to offer them to friends - [ ] Wait until they miraculously turn into full shares > **Explanation:** The best method is to utilize a brokerage that enables the trading of fractional shares. No social media selling here! ## Which of the following does NOT lead to fractional shares? - [ ] Stock Split - [ ] Dividend Reinvestment Plan - [ ] Mergers & Acquisitions - [x] Buying shares directly > **Explanation:** Buying shares directly does not generate fractional shares unless an investment is made in part of a share specifically. ## What is one risk of having fractional shares? - [ ] They can't weather a storm - [x] They can be difficult to sell - [ ] They are prone to increase in value overnight - [ ] They may add up too much to lead to weightlifting! > **Explanation:** While owning fractional shares can be fun, they often lack liquidity.