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Chapter: 1600 Assets Program: CIC 11 1650.0567 Definition of Stocks (CIC) Shares of stock represent ownership in a corporation. The shares of many corporations are traded on the New York Stock Exchange or the American Stock Exchange. Many stocks are also traded "over-the-counter".

Most stocks, for incorporation purposes, are assigned a certain value known as "par value." Par value has no relation to the actual market value of a stock.

The value of a stock is normally determined by the demand for it when it is bought and sold. As the result of constant trading, the value of stocks varies daily. To establish the value of a stock, use the most current closing price.

The individual is required to furnish stock certificates unless the stock is being held for the individual by a securities firm. If so, the eligibility specialist must obtain the individual's copy of the firm's most recent statement concerning the individual's account.

The closing prices (on any particular date) of many stocks may be verified by consulting the following day's newspaper or financial newspaper. If the closing price of a stock is not shown in the next day's newspaper, contact a local securities firm to determine its value.

The value of stocks traded over-the-counter is expressed on a "bid" and "asked" basis. A "bid" is the amount being offered for the stock. The "asked" figure is the amount the seller asked for the stock. Use the bid price to determine the market value of this type of stock.

A local securities dealer’s statement must support the individual’s statement that a stock is worthless. 1650.0568 Stock in a Close Corporation (CIC) A "close" or closely held corporation is wholly owned or controlled by one or more members of the board. Stock in this type of company must be reviewed to determine if the stock is a liquid or nonliquid asset. Usually the stocks cannot be converted to cash within 20 days and they may qualify for exclusion as property needed for self-support.

If such stocks are not traded publicly the value of the stock is determined by dividing the company's net assets (total assets minus liabilities) by the total number of shares. The corporation's net assets can be obtained from the corporation's most recent tax return. 1650.0570 Mutual Fund Shares (CIC) A mutual fund is a company that buys and sells securities and other property as its primary business. Mutual fund shares are generally liquid assets.

The value of mutual funds is determined in the same way as stock values are determined. 1650.0571 Bonds (CIC) When an individual requests that a bond be sold, about seven to ten days are usually required for the individual to receive the proceeds. Therefore, bonds are generally included as assets.

A bond is a written obligation to pay a sum of money at a future specified date. It is a negotiable instrument and is transferable.

Municipal bonds are issued by a state or local government. Corporate bonds are issued by corporations. Government bonds are issued by an agency of the federal government and, except for U.S. Savings Bonds, are transferable.