1. Problem of the day…. What is an IPO?

2. Problem of the day… The bank returns a check cashed by you because there was insufficient funds to cover the check. The check is called:

3. Stock Market Basics

4. Novice Level Bought 100 Shares x $10.00 = $1,000 Sold 100 Shares x $20.00 = $2,000 $2,000 - $1,000 = $1,000 You gained $1,000 Assuming no commission was taken by the broker

5. Apprentice Level Bought 155 Shares x $12.00 = $1,860 Sold 155 Shares x $23.00 = $3,565 $3,565 - $1860 = $ 1,705 You gained $1,705 Assuming no commissions

6. Master Level Bought 2,200 shares x $20.00 = $44,000 Sold 2,200 shares x $18.00 = $39,600 $39,600 - $44,000 = - $4,400 Loss of $4,400 Assuming on commission

7. Grand Master Bought 200 shares x $20.76 = $4,152 Sold 100 shares x $ 23.67 = $2,367 Sold 100 shares x $19.21 = $1,921 $2,367 + $1,921 - $4,152 = $136 You gained $136 Assuming no commission

8. Return on Investment Percentage increase or decrease New Number – Old Number / Old Number (N – O) / O Example: $60.00 original number $70.00 current number Calculate percentage increase or decrease: (70 – 60) /60 = 10/60 = 16.67% gain

9. Return on Investment Beginning Balance of $5,000 in brokerage account Don’t add or subtract from principal Current Balance of $4,900 Calculate return on investment (4,900 – 5,000) / 5,000 = -100/5000 = -2%

10. Calculate Return on Investment Review: Go back and calculate the return on investment from the four previous problems: (novice to grand master)

11. Answers Novice: (2,000 – 1,000)/ 1,000 = 1,000/ 1,000= 100% Apprentice: ( 3,565 – 1,860) / 1,860 = 1,705/1,860 = 91.67% Master: (39,600 – 44,000) / 44,000 = – 4,400/44,000 = - 10 % Grand master: (2,367 +1,921 – 4,152)/ 4,152 = 3.28%

12. Closure/ Homework Calculate the return on your investments in our stock market game Assume no commissions right now