What is another name for stocks in investment terminology?

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Prepare for the EverFi Investing Test with comprehensive quizzes. Study with flashcards and multiple-choice questions, supported by detailed hints and explanations to boost your confidence and knowledge. Be ready to excel in your exam!

In investment terminology, stocks are commonly referred to as "equities." This term captures the essence of ownership in a company, as purchasing stocks represents buying a share of a company's equity or value. When investors buy stocks, they are literally buying a stake in the company's future profits and growth potential.

"Shares" specifically refer to the individual units of stock, and while it's a correct term, it is not as encompassing as "equities." The words “assets” and “funds” refer to broader categories in investing; assets can include a variety of investments, such as bonds, real estate, and cash, while funds typically refer to pooled investments like mutual funds or ETFs that can invest in stocks among other things. Thus, while shares are a part of stocks, "equities" is the broader term that encapsulates all types of ownership shares in public and private companies, making it the synonymous term for stocks.

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