Stock Market Game Current Events

Introduction to Stock Market Common Vocabulary Stock Exchange – Place where publicly held companies are bought and sold Nasdaq – an index based on stock prices of over 5000 companies traded on the market. Transactions take place on a virtual market place. Dow Jones Industrial – An index based on the stock prices of 30 actively traded large companies. This is the oldest and most widely followed index of stock market performance. S&P 500 – An index based on the stock prices of the largest 500 firms traded on the New York Stock Exchange.

Common Vocabulary Public Company – A company owned by investors who buy shares of stock. Shares of the company sold through one of the stock exchanges. Private Company– Company that is owned by a person, family, or group and does not sell shares to public on stock market. Interest– A Fee charged to use another’s money or credit. Simple- Interest calculated at regular intervals on principal only. Compound – Interest calculated at regular intervals on principal and interest added previously.

Stocks/Bonds/Mutual Funds Stocks– Ownership of shares in a business. Common – shares do not guarantee dividend, higher risk – higher returns, includes voting power at annual meetings Preferred – ownership that guarantees dividend if it occurs, is less risk with no voting rights. Shares – A unit of ownership purchased in a corporation or Mutual Fund. Dividends – part of the company earnings that pays as money to stockholders. Bonds– When a company or the government needs to borrow money they sell bonds. Typically sold in certain increments, with a stated interest and maturity (life/term length ) Mutual Funds– company that sells stock in itself and uses the money to buy stocks and bonds issued by other companies. (Benefits include – large variety of investments with smaller risk)

Risks Risk – the chance of losing part or all of an investment. Conservative – Preferred Stock Moderate – Growing companies Beta Number– A calculation that helps measure the level of risk ( higher than 1 provided higher risk and higher earnings potential) Volatility – indicates how quickly the value changes P/E Ratio – Price to earnings ratio- calculated by dividing the current price per share by current earnings per share.

Retirement & Savings 401 K –Retirement savings funded by employee contributions often matched by employer. Tax free until money is withdrawn. IRA’s – (Individual Retirement Accounts) –Long term, tax sheltered deposits that are set up as a retirement plan- has amount limitations ($3000 per year for tax sheltering benefits) Money Market – Special savings account where money is loaned for less than 1 year – usually issued by financial institutions. Certificate of Deposits – (CD’s)Special form of deposit offered by banks that generally pays compound interest for a fixed period of time.

Other Basic Information Bull Market – Period during which stock market prices move up for several months or years in a row. Bear Market – Period during which stock market prices move down for several months or years in a row. IPO – Initial sale of stock to public by investment bankers. Yield – Rate of the return of an investment paid in dividends or interest expressed as a percent Savings bonds – low-denominations savings bonds sold by the government purchased at a discount and can take up to 18 years to mature at full price

READING STOCK MARKET TABLE Before investing in stocks, you will need to understand some basic tools.  One tool is the stock market table.   The stock market tables gives you basic information and price history for stocks.  You can use it to see how stocks you own or are interested in owning are performing, how their prices are changing, and how they have performed in the past.  Reading a stock market table is simple once you understand how to do it.

Here is a sample line from a stock market table for the stock of General Electric: 

Stock Market Table You may find stock market tables in many different places.  One place to look is in the financial section or your local newspaper, or in a financial publication such as the Wall Street Journal.   The internet makes looking up stock table information even easier by using such sites as Yahoo Finance.  With Yahoo Finance, simple type in the stock ticker (if you don't know it first search for it by looking it up with the company's name).

Stock Market Table Assignment 1. (3)What was the total number of shares of Edison International sold on this day? _______________  2. (3)What is the last trade price of the day for Sabre Holding Corp Cl A ? _______________  3. (3)Which company's stock traded the most shares today? _______________  4. (3)Is Hewlett-Packard Co 's stock now worth more or less than yesterday's close?_______________  5. (3)What is the difference between the high and low for Hewlett-Packard Co stock? _______________  6. (3)What is the difference between the high and low for St Jude Medical Inc stock? _______________  7. (3)What is the change in price for the day for Hewlett-Packard Co ? _______________  8. (3)What is the stock ticker symbol of Intl Flavors & Fragrance ? _______________  9. (3)What is the Low of the day for Qlogic Corp ? _______________  10. (3)What is the high of the day for Qlogic Corp ? _______________ 

Reading Stock Table Key ANSWERS 1. 2,539,400  2. 17.87  3. Sabre Holding Corp Cl A  4. Less  5. 1.75  6. 4.71  7. -1.44  8. IFF  9. 37.83  10. 39.43

BUYING STOCKS

Buying Stocks Answers 1. $160.00 2. $102.00 3. $279.00 4. $80.00  2. $102.00  3. $279.00  4. $80.00  5. $324.00 6. $460.00 

How Many Shares?

$100,000 STOCK MARKET CHALLENGE Congratulations! You have been left $100,000 by your long, long, long, long, long, long lost Uncle Chester, who unfortunately recently passed away. However, it seems that Uncle Chester left several stipulations for you to be able to inherit this money. The regulations are as follows: -You must invest the entire gift in the stock market -You must purchase at least 5 different stocks -YOU MUST INVEST AT LEAST 15% OF THE MONEY IN EACH STOCK OWNED

Why your stocks performed the way they did Minimum two paragraphs, at least five sentences, for each stock Explain why your stocks performed the way they did What outside factors caused your stocks to gain or lose? How has the market performed over the course of the challenge?