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New Fellow Education Transfer Plan Cover Sheet


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New Fellow Education Transfer Plan Cover Sheet

  1. 1. New Fellow Education Transfer Plan Cover Sheet Title of ETP Stock Market Simulation Name of IISME Fellow Kent Ezell Fellow’s year-round email Sponsor Company Solectron Name of Mentor Jennifer Shepherd National Board Certificate Middle School Math Area I, the IISME Fellow named above, affirm that the ETP I am submitting is my own work, that I acknowledged sources where appropriate, and that I avoided including any proprietary information of the Sponsor Company. By my submission I am assigning to IISME my entire copyright in the ETP. I understand IISME is simultaneously granting me a license to use the ETP for pedagogical purposes. Signature Date Category Curriculum Subject: Math Level: Middle Staff Development Describe__________________________ Other Describe__________________________ Objectives See attached sheet Abstract (50 words or less) Students will learn basic Stock Market terminology. They will learn how to buy and sell stocks, create formulas and graphs to track their progress, and work a two-month simulation of stock market trading. Emphasis will be placed on practical application to daily math lessons as well as applying Biblical principles to Money Management. Describe how your ETP aligns with the National Board Standard stated in See attached sheet your proposal. This document can be downloaded from D4 under Summer Fellowships, Fellowship Forms. Page 1 of 2
  2. 2. Describe the connection between your ETP and the Summer Fellowship. Solectron is a prominant figure in the Stock Market. Students will use this company as a foundation for understanding how companies function in the stock market. Throughout my fellowship I worked in a work world that was highly sophisticated. I began to see how my students would need to be able to use analytical thinking skills. I also spent extensive time working on the internet and with Excel spreadsheets. All of these components are woven into my Stock Market Simulation. Resources Needed Internet Access Microsoft Excel Graph paper Evaluation/Assessment Pretest, Oral report, weekly assignments, Excel spreadsheets, Measures Used graphs, final assessment test Formatting specifications PC ____ or Mac__X_ (Must be in Word or Text Format) Software used Microsoft Excel Submitted Copy Soft and hard copy due to peer coach by the end of the summer fellowship. Also, a copy of the cover sheet signed by a school site administrator submitted to IISME Oct.3, 2004 to receive $300 grant. I, the Mentor named above [please select one of the following],  have read the attached ETP, and my comments, if any, appear below.  have read the attached ETP, and, as outlined in the IISME-Company Fellowship Agreement, have reviewed it on behalf of the Sponsor Company, and have determined that the ETP does not contain any Sponsor-proprietary information. My additional comments, if any, appear below. Comments: Signature Date Administrator’s comments: Signature Date This document can be downloaded from under Summer Fellowships, Fellowship Forms. D5 Page 2 of 2
  3. 3. Table of Contents I. Scope and Sequence a. Student Objectives b. National Standards II. Lesson Plans a. Stock Market Simulation Weekly Lesson Plans b. Lesson Plans to Teach Excel c. How Does News Influence Stock Prices d. NYSE Stock Market Savvy Lesson Plans III. Student Pages a. What is the Stock Market Pretest b. Stock Talk: Market Terms c. Key Vocabulary d. Whose Money is it, Anyway? e. Stock Market Tutorial f. How to Read Stock Tables poster g. Understanding: Stock Tables h. Yahoo! Finance Activity i. Research a Company j. Stock Ownership: A Delicious Topic k. Worksheet for Graphing l. Market Cycles: What Drives Stock Prices m. Final Assessment IV. Teacher Answer Keys a. Answers for Key Vocabulary b. Stock Market Research Report List of Companies c. Stock Market Company Oral Report Rubric d. Answers for Investing for Kids Tutorial e. Final Assessment Answer Key V. Teacher Resources a. The Proverbs and the Idea of Money b. Explaining the Stock Market to Kids c. What Money Can and Cannot Buy d. A Selection of Money Quotes e. Vocabulary Matching Game Pieces VI. Bibliography
  4. 4. Stock Market Student Objectives 1. Students will understand basic stock market terminology. 2. Students will be able to find and identify companies by name and symbol. 3. Students will be able to chart the progress of specific stocks over a two-month period of time. 4. Students will be able to calculate and graph progress of specific stocks in a simulation activity. 5. Students will be able to create formulas in an Excel spreadsheet. 6. Students will find connections between in-class math work and applications in real world situations. 7. Students will use discernment and problem solving skills to choose stocks to buy and sell. 8. Students will apply Biblical principles to their financial management.
  5. 5. NATIONAL STANDARDS Numbers and Operations 1. Understand Number a. work flexibly with fractions, decimals, and percents to solve problems 2. Understand Meanings a. understand the meaning and effects of arithmetic operations with fractions, decimals, and integers b. understand and use the inverse relationships of addition and subtraction, multiplication and division, and squaring and finding square roots to simplify computations and solve problems 3. Compute Fluently a. select appropriate methods and tools for computing with fractions and decimals from among mental computation, estimation, calculators or computers, and paper and pencil, depending on the situation, and apply the selected method b. develop and use strategies to estimate the results of rational-number computations and judge the reasonableness of the results Algebra 1. Understand Patterns a. represent, analyze, and generalize a variety of patterns with tables, graphs, words, and, when possible, symbolic rules; b. relate and compare different forms of representation for a relationship; c. identify functions as linear or nonlinear and contrast their properties from tables, graphs, or equations. 2. Use Mathematical Models a. model and solve contextualized problems using various representations, such as graphs, tables, and equations. 3. Analyze Change a. use graphs to analyze the nature of changes in quantities in linear relationships.
  6. 6. Data Analysis and Probability 1. Formulate Questions a. formulate questions, design studies, and collect data about a characteristic shared by two populations or different characteristics within one population 2. Develop and Evaluate a. use observations about differences between two or more samples to make conjectures about the populations from which the samples were taken b. make conjectures about possible relationships between two characteristics of a sample on the basis of scatterplots of the data and approximate lines of fit 3. Understand and Apply a. use proportionality and a basic understanding of probability to make and test conjectures about the results of experiments and simulations b. compute probabilities for simple compound events, using such methods as organized lists, tree diagrams, and area models Problem Solving 1. build new mathematical knowledge through problem solving; 2. solve problems that arise in mathematics and in other contexts; 3. apply and adapt a variety of appropriate strategies to solve problems; 4. monitor and reflect on the process of mathematical problem solving. Reasoning and Proof 1. make and investigate mathematical conjectures 2. select and use various types of reasoning and methods of proof Connections 1. recognize and use connections among mathematical ideas; 2. understand how mathematical ideas interconnect and build on one another to produce a coherent whole; 3. recognize and apply mathematics in contexts outside of mathematics
  7. 7. Stock Market Simulation ETP Presentation by Kent Ezell Lesson Plans (One day a week) Week 1:  Introduce Stock Market Simulation. Highlight main ideas and objectives to be covered this semester. Make connection between math that is learned in class and real world application.  Give the “What is the Stock Market” Pretest located in the student pages.  Assign students to do the “Stock Talk” skit. Have students fill in the answers with a partner. Go over the answers together as a class.  Go over “Key Vocabulary” of the stock market. The vocabulary sheet is found in the student pages. Have students fill in the words that match the definitions.  Assign students to read “Whose Money Is It, Anyway” found in the student pages. Week 2  Discuss with the class what the Bible says about money. What were the steps Larry Burkett laid out? How do they apply to our lives?  Students will need to use a computer with internet access. Have students read, “The Stock Market” found at  Give students the worksheet “Stock Market Tutorial” found in the student pages. The information is found at the thinkquest website.  The worksheet is due next week Friday. Week 3  Collect the worksheet from the students. Go over answers that are found in the teacher answer section.  Hand out “How to Read Stock Tables” posters. Talk through the different parts of the table with the students.  Have students complete “Understanding Stock Tables” on their own. Walk around the room to check for understanding.  Take the students to the computer lab. Have the students log on to the website Have the student click on “Symbol Lookup.” Show the kids how to find the symbol of the company. Type in Coca-Cola in the box. See how Coca-Cola’s symbol is “KO”  Have the students do the other five companies on the Yahoo! Finance worksheet found in the student pages. hhhh  Highlight for the students the key features that they will be using. Have the students do the rest of worksheet “Yahoo Finance Activity.” Make sure the students each have SLR (Solectron) as the company on the screen.  Walk around the lab to make sure students are doing the worksheet correctly.
  8. 8.  The worksheet is due next week Friday. Week 4  Bring the students to the computer lab. Assign each student a company to research. Make sure the company is large but not one that the students would know.  Tell the students that they will be giving an oral report on the biography of the company next week Friday, and they will need to give a hard copy to the teacher.  Explain why they are researching a company before they buy its stock. Use the quote from Peter Lynch - go with what you know. “During a lifetime of buying cars and cameras, you develop a sense of what’s good, what’s bad, what sells, and what doesn’t. If it’s not cars you know about, you know something about something else. And the most important part is, you know it before Wall Street knows it.”  Go over the instructions of worksheet “Research a Company.” Week 5  The students will give their oral reports. Use the rubric in the teacher answer section to assess it. Week 6  Students will need to work at a computer with Excel on it.  To briefly explain how a spreadsheet works, go to Work through labels, formulas, values, and symbols. Once students have a basic understanding of how a spreadsheet works, they will be able to create their portfolios.  Use the Lesson Plans “Teach Excel” to show students how to create formulas. They will be creating a Cash Balance Sheet and a Portfolios Sheet. Week 7  Read “Stock Ownership” together as a class. Have students answer the questions.  Discuss with students how to choose stocks. Remind them of Peter Lynch’s quote – go with what you know.  Students will need to pick between 7 and 10 stocks. Give students an opportunity to use Yahoo Finance to research a variety of stocks. They will need to have their stocks chosen by next week. Week 8  Students will ‘buy’ their stocks. They will be choosing which stocks they want to purchase and how many shares of each stock. There will be a $15 commission on each buy or sell. Students will only be allowed to buy/sell on Fridays in class.
  9. 9.  They will need to create a graph for each stock they purchase. Use “Graphing Stocks,’ as a reference for instructions on how to graph. Have students use the 52- week highs/lows for setting up the range of their graph. * Have a stack of graph paper available throughout the unit for students to pick up as they purchase new stocks.  Each week students will plot their new points for each stock they own. As they sell, they will mark the selling price and date of sale. For each new stock they purchase, they will enter the purchase price and date of purchase. Weeks 9-20  Students will buy/sell stocks based on their productivity.  Students will fill in their excel sheet and plot their graphs each week. These will be turned in before they leave class on Friday and returned to them the following week.  Students will be encouraged to dialogue with their peers as to the success or failure of their chosen stocks. Week 21  Final Evaluation: Students will be assessed on their understanding of how to read a stock market page, how to buy/sell stocks, and understanding of the terminology. Enrichments to becompleted during weeks 9-20:  How news affects the stock market – see Lesson Plans “How Does New Influence Stock Prices” – teacher will need to create questions based on current events, samples are given in the lesson plans.  Fieldtrip to the San Francisco Stock Exchange  Guest speaker – parent who is actively involved in the stock market. Explain how he got involved, why he enjoys it, and any advice for students.
  10. 10. Lesson Plans to Teach Excel (The teacher should have a basic understanding of Excel to execute this lesson plan.) 1. Have the students open a blank Excel spreadsheet. 2. The students should name their spreadsheet by doing a “Save As.” Call it “Stock Market -<student’s name>” 3. On the bottom of the spreadsheet, rename “sheet1” to “Cash Balance” a. Click on the tab (it says Sheet1) using the right mouse button (Macintosh computers should click on the tab at the same time holding down the “Control” key.) b. Click on “rename sheet.” c. The tab should be highlighted which indicates that the tab is ready to be changed. 4. Rename “sheet2” to “Portfolio Balance” 5. Cash Balance Sheet 6. Click the “Cash Balance” sheet tab. 7. Title your sheet by putting the school’s name in box A1 8. Take your mouse and highlight the cells A1 through G1. 9. Then press the “merge and center” button. This should spread out your Title across the spreadsheet. You may have to extend or not extend as much over the cells if at the end of the lesson plan the title is not centered. 10. On cell A3, type in “Date”, A4 type “Description,” A5 type “purchase price,” A6 type in “Purchase Price,” A7 type in “Amount of Shares Purchased,” A8 type in “Total Cost of Purchase” and A9 type in “Balance” 11. Since the students have 100,000 to spend, type in 100,000 in F4 12. Put your pointer in-between column “A” and “B,” your pointer should have changed into arrows. With your mouse held down, move the mouse to the right until it says “20.00.” Do the same for “purchase price,” “Amount of shares purchased” “Total Costs of Purchased” and “Balance,” but drag those until it says “15.00.” 13. In cell A5, put the date of purchase for a stock. 14. In cell B5, put the description of the transactions. Since this is a cash balance sheet. The description here should only be either purchased a stock or sold a stock. 15. In cell C5 and C6, put in “purchase price” and “amount of shares purchased”
  11. 11. 16. In cell E5, put in the formula “=(C5*D5)” It is important to explain to the students how to make a formula, so that in the future the students will be able to make their own formulas. a. All formulas start with the “=” sign b. All formulas use the order of operations standard c. Have the students use parenthesis to make the formula d. Total cost of purchase is cell C5 times D5. 17. In cell F5, put the formula “=(F4-E5).” Teach the students how the formula works 18. Do the same for all the other stocks purchased. 19. If stocks are sold put a minus sign in front of the amount of stocks sold. For example, if 1000 stocks are sold, then the cell in the Quantity of stocks column should be “–1000.” Portfolio Sheet 20. Click on the “Portfolio Balance” tab 21. Title the sheet like in the “Cash Balance” spreadsheet 22. In row 3, put in each subsequent cell Date, Description, Quantity of shares, purchase/sell price, current stock price, change in portfolio, and portfolio balance. 23. Set up the size of the cells like in the “Cash Balance” sheet 24. Have students put in the date of purchase, description of the stock, quantity of stocks they purchased, and the purchase price. (Leave Current stock price alone for now). 25. In cell F5, teach the students the following formula, “=(C5*D5)” 26. In cell E5, copy the amount from F5 27. Each week the student will monitor the progress of the stock. If the stock changes, then an entry will need to take place. If the stock goes up, then put the date and the description, and put into the “Current Stock” column the price currently. 28. Then put in a formula that looks like,” =(E6-D5)*C5” into “Change in Portfolio” column 29. Then in the “Portfolio Balance” column, put the following, “=(G5+F6)”
  12. 12. 30. If the stock goes down, the formulas in “Change in Portfolio” and “Portfolio Balance” will not change. You will get brackets around the number in the “Change in Portfolio” to indicate that the number is in the negative. 31. I suggest that you keep each purchase together. For example, if the student purchases 1000 shares of Microsoft, then have the subsequent lines be about how those 1000 shares are doing. See diagram below. Microsoft Group Solectron Group
  13. 13. How Does News Influence Stock Prices? Subjects: Economics, business, language arts, and social studies Time Period: One class period Resources: Internet access and/or newspapers Objectives: Students will learn that economic news and business events can change the price of a stock. They will see that the unexpected events that benefit or harm the company will in turn move the company’s stock price up or down.  Certain internal and external factors will affect share prices.  By learning about the relationship between business events and share prices, students will be able to form a strategy in buying and selling stocks for the Global Stock Game (GSG). Background: A number of factors influence share prices. Some internal factors include: • Earnings growth • Sales growth • Product release • Leadership changes • Lawsuits pending Also, some external factors change the share prices: • New market competition • Economic news such as interest rates and inflation • Government policy changes Activities: 1. Teachers will select news from newspapers or Web sites like Yahoo!, MSN, CBS Market Watch, and the Wall Street Journal interactive edition. 2. Next, the teacher will read the business news concerning a specific company or the general economy to the students. 3. Then, the teacher will ask questions about how these events would influence the share price of the company or the stock market in general.  There will be four typical answers: • Share prices will likely increase • Share prices will likely decrease • Share prices will likely be unchanged • Not enough information to determine Here are examples of news events and the likely responses.
  14. 14. After the meeting of the Federal Reserve’s open market committee, Chairman Alan Greenspan declared an increase of 0.25% in interest rates. Share prices of the real estate companies and home builders will likely: Answer • increase • decrease • unchanged • can’t determine U.S. productivity sees 6.4% increase, the largest gain since 1992. Share prices of General Electric, IBM, and 3M will likely: Answer • increase • decrease • unchanged • can’t determine 1. Oil prices hit $34 per barrel, the highest since the Gulf War. Share prices of United, South West, and Delta airlines will likely: Answer • increase • decrease • unchanged • can’t determine 2. Judge Jackson rules that Microsoft has a monopoly on PC operating systems.  Share price of Microsoft will likely: Answer • increase • decrease • unchanged • can’t determine 3. AMD begins shipping a microprocessor that achieved an industry milestone with a clock speed of one gigahertz, processing one billion bits of information a second, the computer industry's equivalent of breaking the sound barrier.  Share price of AMD will likely: Answer • increase • decrease • unchanged • can’t determine 4. Because businesses no longer fear Y2K, PC shipments are expected to rise 20% from the first quarter a year ago. Share prices of Dell, Intel, and Compaq will likely: Answer      • increase • decrease • unchanged • can’t determine
  15. 15. 5. Al Gore claims he invented the Internet.  He is leading the polls and will most likely become the first president of the new millennium. Share prices of Yahoo!, AOL, and eBay will likely: Answer • increase • decrease • unchanged • can’t determine 6. Yahoo!’s “Surprise Earnings” news reported that Procter & Gamble, maker of Crest toothpaste and others, projected that earnings will be 21% below the Wall Street experts’ (analysts) estimate due to higher expenses.  Share price of P & G will likely: Answer • increase • decrease • unchanged • can’t determine 7. AOL surprisingly announces the mega merger with media giant Time Warner, signifying the growing power of Internet companies.  Share prices of Yahoo! and Earthlink will likely: Answer • increase • decrease • unchanged • can’t determine 8. The co-chairman of Citigroup, John Reed, announces his retirement.  The successor, Sandy Weill, will become the sole CEO.  Robert Rubin, former Secretary of Treasury, will likely take over the top job in 2 years when Weill retires.  Wall Street experts think Reed’s retirement is a positive to the company.  Share price of Citigroup will likely: Answer • increase • decrease • unchanged • can’t determine 9. President Clinton announced that U.S. and Britain agreed to openly share data from a project to map human genes.  Shares prices of the biotech stocks will likely: Answer • increase • decrease • unchanged • can’t determine
  16. 16. 10. Yahoo! held talks with eBay about various forms of partnership and a possible merger.  Share price of eBay will likely: Answer • increase • decrease • unchanged • can’t determine 11. Sears and America Online unveiled a wide-ranging strategic alliance that includes cross-marketing and promotional agreements.  Share price of Sears will likely: Answer • increase • decrease • unchanged • can’t determine 12. The strike of Boeing’s engineering and technical workers has delayed some testing and production of the F-22 fighter.  Share price of Boeing will likely: Answer • increase • decrease • unchanged • can’t determine 13. Intergraph's antitrust suit against Intel was dismissed. Share price of Intergraph will likely: Answer • increase • decrease • unchanged • can’t determine
  17. 17. Answers to “How Does News Influence Stock Prices?” 1. Share prices will likely decrease.  If the Federal Reserve declares an increase in interest rates, mortgage payments will increase.  This increase will cause housing to be less affordable, therefore hurting share prices of real estate companies. 2. Share prices will likely increase.  Companies such as General Electric, IBM, and 3M will be more profitable as a result of higher productivity.  The companies will be able to make more while having a lower cost to produce the product. 3. Share prices will likely decrease.  The airline companies will have to pay a higher fuel cost.  They will not be able to pass along the increased cost to consumers or raise the cost because of the increase in fuel prices. 4. Share price will likely decrease.  Because the judge declares a monopoly on Microsoft, the government will likely put penalties on Microsoft.  Also, hundreds of private pending lawsuits are arising against Microsoft. 5. Share price will likely increase.  AMD beat industry leader Intel for the fastest microprocessor and will also take market shares away from Intel. 6. Share prices will likely increase.  Because of increased shipments, companies will have an increase in sales and, therefore, profits. 7. Share prices will likely increase.  If Al Gore becomes the next president, he will likely have policies favorable to Internet businesses. 8. Share price will likely decrease.  Changes in share prices are greatly tied to earnings.  In addition to P & G’s reported poor earnings, Wall Street doesn’t like downside surprise earnings. 9. Not enough information to determine.  The announcement of the merger is too early to determine whether it will have any impact on Internet companies like Yahoo and Earthlink. 10. Share price will likely be unchanged.  All three management are well-respected industry leaders.  The retirement of any one will not affect the operation of the company because all are competent to take over the job without any problems. 11. Share prices will likely decrease.  The private sector will be competing with the huge amount of resources and research as a result of the government-funded labs. 12. Share price will likely increase.  eBay will likely be the target that Yahoo will acquire. 13. Share price will likely increase.  The alliance will likely cause an increase in Sears’ sales because of the exposure on the Internet to the 22 million AOL users. 14. Share price will likely decrease.    The strike will likely affect Boeing’s sales and delivery of products to the government. 15.  Share price will likely be unchanged.  Intergraph will not be able to get any compensation from Intel.
  18. 18. Stock Market Savvy Investing for Yo u r F u t u r e Information for Educators from the New York Stock Exchange The New York Stock Exchange, with the assistance of Lifetime Learning Systems, a division of Weekly Reader, is proud to present this free educational program, Stock Market Savvy: Investing for Your Future. Specifically designed for middle school and high school students, this program includes eight reproducible activities that can be cus- tomized to the needs of your class. The goal is to introduce your students to the financial world of long-term savings and invest- ment in stocks. Students will see that long-term savings through investment in the securities market is integral to the economy and their own personal lives. This program will introduce students to the high-tech, exciting nature of the NYSE and the skilled market professionals that use state-of-the-art technology on the Trading Floor. They will also understand that the NYSE maintains high standards of conduct and integrity in the auction market to ensure fair trading in secu- rities for all investors. Stock Market Savvy: Investing for Your Future also helps students discover how to make informed investment decisions and understand why long-term savings through securities investment is important as they prepare for their future goals and dreams. Although the material is copyrighted, it can be reproduced for teaching purposes. Please complete and return the enclosed Educator Reply Card to receive future free educational programs and the enclosed survey to provide feedback on this program.
  19. 19. Program Objectives Provide students with an understanding of the world of securities investment and its importance to their personal lives and private enterprise. Introduce students to the high-tech, exciting nature of the NYSE and the skilled market professionals on the Trading Floor and in the equities marketplace. Teach students about the high standards of con- duct and integrity at the NYSE that ensures fair Up Close and Personal trading for all investors. Explore how supply and demand affects stock prices in the securities marketplace. 1 The Stock Market & You Objective: This activity introduces students to the securities market, helps Encourage teachers, students, and their families them make a personal connection to the New York Stock Exchange auction to explore the opportunities for long-term market, and understand how public companies affect their daily lives. savings growth as active and informed investors. Begin by asking students what they know about the stock market. Explain Target Audience that Wall Street in lower Manhattan is home to the New York Stock Exchange. This program is designed for middle school and high Encourage students to visit to learn about the history of the school students in social studies, business, econom- New York Stock Exchange. ics, math, consumer skills, or other relevant classes. It Find out how many students or their families own stock. Explain that their is helpful when teaching financial responsibility or families might participate indirectly in the stock market through retirement for use in after-school stock or business clubs. accounts or 401(k) plans at their jobs. Explain that stock is a share of ownership in a business. Ask students Program Components to provide examples of things that they own. Then, explain that stock owner- This eight-page teacher’s guide, which contains curricular objectives, background information, ship provides risks and rewards to investors. instructions for using the student activity mas- Discuss why it is important to save. Have students consider things they want ters, answers to the student exercises, and sug- to save for now (computer games, clothes, sports equipment, DVDs). Then gested extension activities have them think about their future goals (college, car, house). Explain how Eight reproducible student activity masters their need for savings will increase as their goals become more expensive. Two different full-color wall posters for class- Discuss that even at a young age investing in stock can be part of long-term room display financial planning that will lead to security and economic independence A teacher survey later in life. Distribute the activity sheet and have students work individually or in small How to Use the Posters groups to complete it. They should use, search the Internet, or Please display both posters in your classroom. check newspapers to find out if any of the companies they wrote down are Poster #1 (New York Stock Exchange): This poster NYSE-listed companies. will familiarize students with the New York Stock Point out that some companies are harder to find because they are Exchange and help them appreciate the role NYSE- subsidiaries of larger corporations, known as parent companies. An Internet listed companies play in their daily lives and the econ- search will help students determine the parent company’s listed name. omy. Owning stock in a company means owning a piece of that business. Investments grow over time and After students complete the activity, compile a class list of NYSE-listed com- this means young investors can create a great oppor- panies that manufacture or sell products and services associated with favorite tunity for future earnings. student activities. Poster #2 (How To Read Stock Tables): One way to get a stock quote during the day is to look at the electronic tape on the Internet (at websites like or on television. These rolling Stock Talk lists of stock symbols and prices are continuously updated after each trade. For more information, you can also read a stock listing. This poster shows 2 Market Terms how to read NYSE stock listings in daily newspa- Objective: This activity introduces students to basic stock market pers or on the Internet. It uses a newspaper stock terminology, familiarizes them with the special characteristics of the NYSE listing to explain the various headings. Refer to auction market, and explains why a company issues stock. this poster when your students begin Activity 3: Introduce this activity by explaining that the NYSE is an auction “Understanding Stock Tables,” which presents the market where buyers and sellers of securities meet and compete for stock listing as it might appear on the Internet. the best price for their customers. A trade takes place when the best Remind students that the information is the same bid meets the lowest offer to sell. Stock prices are determined by whether they’re reading a stock listing in the newspaper or online. supply and demand.
  20. 20. Conduct a mock class auction of different items (e.g., a CD, Extension Activity movie tickets, a night of no homework, etc.) to see how much Have students brainstorm ideas for a business that they could students are willing to pay for them. Explain that the NYSE is a live start and run (e.g., grass-cutting or pet-sitting business). Ask auction. If they’ve used Internet auction sites, then they know that a students to list some of their business expenses (e.g., lawn seller puts an item up for sale and several people compete to buy the mower, pet food, flyers to advertise, etc.). Then, discuss how a item. The same thing happens with stocks as buyers and sellers com- business can raise the capital it needs: the students can invest pete for the best possible price. their own money, borrow from the bank, issue bonds, or sell Distribute the activity sheet, have students role-play the characters stock in the business to outside investors. Then, review what they in the dialogue, and complete the activity. Review the answers will do with the profits (distribute among shareholders or save as a class. some of the profit and reinvest it in the business). Answers 1. Initial Public Offering 16. Dividend 2. Bull Market 17. Capital Understanding 3. Bear Market 4. Stockbroker 5. Stock 18. Supply 19. Bond 10. Demand 3 Stock Tables Generate a class discussion using terms and topics presented in the Objective: This activity focuses on how to read stock tables in a activity. Explain that a company that wants to grow has several ways newspaper or on the Internet. to raise funds and review the pros and cons of each method: Ask students to describe what it means to be an informed investor. 1. The company owners can use personal funds to expand the Recommend reading financial newspapers, magazines, and business, but available funds will be limited and the business websites for investment information. Explain that stock market expansion will be relatively short-term. activity is reported through a variety of indexes which measure the state of the economy. When you hear “the market was up,” people 2. The company can borrow from a bank, but it can only are referring to an index. One of the best known and most widely borrow what it can prove it will be able to pay back at its cited indicators is the Dow Jones Industrial Average which tracks current level of business. It will have to repay the loan plus the stock prices of 30 major “blue chip” companies. interest almost immediately after it has received the funds. Explain to students that being an informed investor also means 3. A company may issue bonds. A bond is an I.O.U. or loan from understanding how to read stock tables. The traditional way to investors. Investors lend a company money and after a certain check stock tables is in the business section of newspapers. Today, time the bond “matures” and the company then pays each this information is also available in real-time format on the Internet. investor the amount they invested plus interest. This option Explain that the Internet has revolutionized how people retrieve carries the burden of repayment with interest. their stock information. 4. A company can raise funds by selling shares of ownership in Refer your students to Poster #2: “How To Read Stock Tables” itself, called stock, to the public. When a stock offering is and review what the various headings mean. The poster shows successful (many people buy the new stock), a company can how stocks are read in newspapers and online, using a newspaper obtain large amounts of capital and can use these funds imme- stock listing to explain the various headings. On the activity sheet, diately for expansion. Then, if profits increase, the stockhold- students will be presented with a stock table as it might appear ers will share in the company’s success by receiving dividend online. If your students are interested in seeing examples of actual payments. This option places no fixed limit on the amount of online stock listings, have them log on to funds a company might raise and no restrictions on the opportunities for growth. Distribute the activity and review the answers as a class. This activity can be customized to match the skills of your class. Discuss reasons why a company might decide to go public (the Create additional math questions to challenge the class. process when a company offers shares of stock to the public for the first time): raise capital, expand operations, fund research and Answers development, pay off debt, provide employees with benefits, and 1. $10,528.00 4. $168.00 develop marketing strategies. Remind students that the purpose of 2. $104.95 5. $5,488.00 issuing stock is to raise funds that will help a company grow. This, 3. 3,976,700 in turn, creates more jobs, generates additional revenue, contributes to the development of better products, and helps to pro- Extension Activity mote general economic expansion. Have students look up an NYSE-listed company that interests them on and answer the same questions that they did in Activity 3: “Understanding Stock Tables.”
  21. 21. Ready, Set, called e-BrokersSM to receive orders, improve the flow of infor- 4 Auction mation between customers and the point of sale, and manage their inventory. Explain that the high-definition post display units, the computer Objective: This activity is designed to familiarize students with the monitors above the trading posts, contain a variety of information skilled market professionals who work on the Trading Floor and the about the stocks that are sold there (stock symbol, last sale, net advanced technology that delivers fast, efficient, and cost-effective change, bid and offer, and volume). trade executions. The NYSE is governed by a precise set of rules and regulations and also uses technology to maintain continuous mar- Distribute the activity sheet and encourage students to visit ket surveillance to ensure fair and efficient trading. to learn more about the technology and to experience an exciting 3-D view of the NYSE Trading Floor. Introduce this activity by explaining what it means to have a seat Review the answers as a class. on the Exchange. There are 1,366 seats and they are not physical seats, but membership that can be bought or leased. A seat is a Answers property right that gives you the right to trade. Remind students 1. B 5. A that NYSE-listed companies don’t own seats. Although individuals 2. F 6. D can buy seats, they are primarily owned by brokerage houses and 3. E 7. H investment firms. So if XYZ Brokerage House buys 20 seats, they 4. C 8. G have 20 members. Explain to students that securities are traded by highly skilled mar- ket professionals who have qualified for membership in the NYSE. Anatomy of a There are different types of membership in the NYSE and each one serves a different purpose on the Trading Floor: 1. Floor brokers constitute the largest single membership group 5 Trade of the NYSE. They receive their orders electronically on the Objective: This activity focuses on how a stock is traded at the Trading Floor either at their trading booth location or on NYSE as students place the steps in chronological order. mobile, wireless handheld computers. Explain to students that when they check the price of a stock, they’re 2. Specialists serve as the contact point between brokers with checking a quote. Like an auction, there are two prices: a bid and an buy and sell orders in the NYSE’s agency-auction market. asked. If you want to buy a certain stock for $30, that’s your bid. The Each NYSE-listed stock is allocated to a specialist, who person who owns the stock wants to sell it for the highest price pos- trades only specific stocks at a designated location called a sible, say $30.02. This is the offer or asked. The difference between trading post. The number of stocks traded by an individual the bid and asked price is called the spread. specialist varies according to the total activity of the stocks. Explain that investors must indicate the type of order they want to These professionals are responsible for overseeing the place when buying or selling stock. Some common types of orders orderly trading of specific stocks to maintain the market’s include: A market order, which tells the broker to buy or sell at the fairness, competitiveness, and efficiency. best price currently available, and a limit order, which tells the bro- Ask students how technology has changed their lives. Explain that ker to buy or sell at a specific price or better. The broker will try and the NYSE has evolved into the most technologically advanced get the best possible price for the customer, but can’t sell below or equities market in the world. It uses technology to support and buy above the specified figure. enhance human judgment, trading over 1.4 billion shares daily. Reemphasize the roles of the market professionals and their Explain that over the last 211 years, the NYSE has used technology interaction with the NYSE technology. While a stockbroker (often to improve service, increase trading, and maintain a fair trading another term for financial consultant) can make investment environment. For example, in the decade following the Civil War, recommendations, and the NYSE technology speeds and the stock ticker (invented by Thomas Edison) and telephones safeguards the transactions, the investor must take the ultimate increased trading and opened Wall Street to investors across the responsibility for understanding his or her investments. country. In 1975, the consolidated tape was introduced as a world- Distribute the activity sheet for the class to complete and then have wide reporting system of price and volume data for trades in all students take turns going through the correct order. markets in which the securities trade. Today, through a sophisticat- Answers ed electronic network called SuperDOT®, 95% of orders make their 3, 1, 4, 6, 5, 8, 7, 2 way to the specialists’ workstations on the Trading Floor. About 5% of orders are walked out by brokers to the specialists (these are large, institutional orders). As the NYSE evolves toward a paperless Extension Activity Trading Floor, floor brokers are using wireless, handheld devices Invite a member of a local brokerage firm to talk to the class about his or her job and finance as a career. Have students pre- pare questions in advance of the visit.
  22. 22. Answers 1. With the orange crop supply reduced by the lack of rain, the bottlers’ costs will rise as companies pay a premium for the oranges they need. The companies will probably have to raise prices for their products to offset increased expenses, but will need to be careful that they don’t price orange juice so high that they lose customers. Ask the students to discuss how weather and natural disasters can affect the price of the foods we eat, and in turn, the companies that provide that food. 2. Stock prices in battery companies will rise as battery-pow- ered vehicles become more popular as a way of saving on gas and reducing pollution. Have the students discuss what gas companies might do to compete with growing interest Market Cycles 6 What Drives Stock in battery-powered cars (Reduce pollutants in gasoline? Cut gas prices?). Prices 3. A big movie can generate a large, profitable merchandising Objective: This activity explores how supply and demand tie-in chain reaction among toy, clothing, food, and many drive stock market prices in the NYSE auction market. Students other manufacturers. And a flop can result in a similar chain also discover how outside events and news can affect the reaction of losses for all those companies. Have the students NYSE’s auction market. discuss the kinds of tie-ins that occur, and their short- and long-term economic effects. Introduce this lesson by asking students what influences stock prices. Explain that different events can move a company’s price 4. Competition is a fact of life for any company. Unless Digital up or down. Industry factors that drive stock prices include Dream can find a way to cut costs, it’s likely that it will lose earnings or sales growth, new product releases, leadership customers to its competition, and will face dwindling profits. changes, or legislation. Outside forces and world events like new The competition will be enjoying the profits of successful competition, economic news such as interest rates and inflation, new products. Discuss with the students the need for com- government policy changes, natural disasters, or weather can panies to invest some of their profits in research and devel- also affect stock prices. opment to find new products and improve existing ones. Remind students that the laws of supply and demand determine stock prices in the securities markets. Provide examples that Extension Activity they can relate to (old baseball cards, popular sneakers or fash- Have students review national and international news ion trends, electronic toys, gasoline). To familiarize students headlines or news broadcasts to determine which types of indus- with the concept, you can also talk about the effect of rumors or tries they might monitor for investment. Also, encourage stu- speculation. Relate rumors to supply and demand and discuss dents to check interest rates and determine how they will affect how they can affect market cycles. stock prices. Then explain that the supply of stocks is based on the number of shares a company has issued. The demand is created by people wanting to buy those shares from investors who already own them. Market Regulation If people think they will make more money on a stock, they will want to buy it. But supply is limited, and not everyone who wants to own a company’s stock can. The more that people desire to own a 7 Protection for All Investors stock, the more they will be willing to pay for it. Objective: This activity focuses on the integrity and self-regulation Help students understand that an awareness of current events can of the NYSE, its zero tolerance for inappropriate conduct, and how help them become educated investors. While investors and ana- this works to ensure fair trading for all investors. The NYSE places lysts decide whether a stock is worth buying by examining the the highest importance on fairness and on earning and keeping the financial health and profit history of a company, they also look at trust of its investors. how news events can influence stock prices by their effect on sup- Distribute the activity sheet and have students review the pyramid ply and demand. of regulatory agencies. The market protects and maintains itself Distribute the activity sheet and have students work in small groups through the combined efforts of four groups that comprise the reg- to analyze the impact of the news events. Review their answers as a ulatory pyramid: class, drawing upon the suggested answers that follow. 1. The U.S. Congress forms the peak of the regulatory pyramid. Congress created the SEC and other organizations to protect and enforce fair trade on U.S. securities markets.
  23. 23. 2. On the next level is the Securities and Exchange Commission Getting Started (SEC), the federal watchdog agency that regulates and strictly enforces conduct of every organization participating in U.S. securities markets. 8 Investing Objective: This activity challenges students to carry out 3. On the next level is the NYSE and other self-regulatory a process-oriented assignment, researching companies, organizations. The NYSE is the most active self-regulator and making investment decisions as they begin to build a port- in the securities industry. Its extensive rules, policies, folio. Students can work individually or in teams to research standards of conduct, and comprehensive high-tech surveil- companies for investment. lance of its member organizations and the investment com- munity ensure operation at the highest levels of fairness and Distribute the activity and explain the concept of a portfolio integrity. Over a third of NYSE employees work in regulation. (a person’s investments). If you’re a professional photographer, you have a portfolio of your work. If you’re an investor, you have a group 4. The broad base of the pyramid consists of individual of investments, which include stocks, bonds, and other securities. brokerage firms that are members of the securities markets. Self-regulation, the way the securities industry monitors Stress the importance of being an informed investor and remind itself to create a fair and orderly trading environment, begins students that the majority of people invest in stocks to build long- with the strict rules of conduct enforced by these firms. term savings. Explain that this network of regulation is designed to detect, Explain to students that they’re going to research three companies investigate, and punish all forms of improper conduct to ensure fair from different sectors. Encourage them to consider investments in trading to all investors. companies that interest them. They should consider the financial health of companies whose stock they want to purchase and pay Explain that NYSE StockWatch is a state-of-the-art computer attention to news events. They can use, the Internet, surveillance unit that continuously monitors the stock market the library, newspapers, magazines, and annual reports to obtain for unusual trading patterns. their information. Distribute the activity and have students base their answers on the Students should fill in the activity sheet and then write a report questions provided, specifying the appropriate agencies involved. based on their research. Write the following questions on the board Answers that students should consider when researching: How is the indus- Case Number 1: The NYSE’s self-regulatory system would have try sector doing? What is the history of the company and how has it detected the firm’s fraudulent activity and taken appropriate changed? (e.g., What did the company originally manufacture/sell action against it. or what service did it originally provide? Does it still provide those Case Number 2: Both the SEC and the NYSE’s self-regulatory products or services? What other products and services does it pro- system would investigate this type of fraud. The NYSE’s market vide today?) When did the company start and when did it go pub- surveillance system would detect the friends’ attempt at an lic? Who is the President or CEO? Where is it based? How many insider purchase of Super Soda, discovering that they graduated employees does it have? Does it have an international division? from the same college, live near each other, that Karen bought a What was its profit and debt last year? Did the company issue any lot of shares before the stock price jumped, and Janice worked dividends in the last five years? What was the company’s price for the firm that provided advice on the merger. The SEC would change over the last year? get involved because they can also prosecute insider trading. As students complete this activity, they will begin to recognize how These agencies would monitor the suspicious transaction and their education and personal interests influence the informed deci- prosecute the friends. sions they make about purchasing stock. Case Number 3: The brokerage house would have disciplined the broker for violating rules of conduct of the firm and the NYSE Extension Activity would have taken disciplinary action as well. Two weeks after students complete this assignment have them compare how their stocks have done. Ask them: Would you make any different decisions on stocks you bought? Did any out- side event affect your stock? Could you have foreseen it? What would you add to your portfolio? © 2001 New York Stock Exchange, Inc.
  24. 24. What is the Stock Market Pretest? Name ______________ 1. What is a stock?     2. How do you buy and sell stocks?     3. What are the benefits of buying stocks?       4. What are the disadvantages of buying stocks?       5. How do you know what stocks to pick?       6.What math does a stockbroker need to know to work in the stockmarket?
  25. 25. Stock Talk MARKET TERMS Activity 2 EVERY BUSINESS has its own language. To understand the stock market, let’s listen in on one family’s breakfast conversation. Soon you’ll be “talking the talk”! JAMIE: (teenager) Did you hear that the new model MOM: We thought the value of communications of the cell phone I got last year has a built-in industry stocks would grow over the long term. MP3 player? The stock market moves in cycles from a period when stock prices are generally rising, known as DAD: It sure sounds like Talk2Me knows teens. a bull market, to times when stock prices on the JAMIE: Don’t you own stock in Talk2Me? You should whole are falling, called a bear market. call your stockbroker to buy more. They make JAMIE: What makes stock prices rise or fall? so many cool products! DAD: Stock prices go up or down depending on MOM: We bought stock when the company had its supply and demand. initial public offering a few years ago. JAMIE: What else influenced your choice in buying JAMIE: What does that mean? this stock? MOM: Talk2Me went public so they could raise money, MOM: From our research, we also learned that or capital, to expand and create new products Talk2Me pays its shareholders dividends, or like the MP3 phone. money from it’s profits. You’re catching on... DAD: At the time, we only owned bonds, which are JAMIE: So does that mean I get a new MP3 phone? loans that investors make to corporations and governments. The lenders earn interest, and the borrowers get the money they need. DIRECTIONS: After reading the dialogue, fill in the blanks using the key terms provided to test your knowledge of some common stock market terms. 1. A/An ______________ is the first time a company 18. ______________ is the quantity or amount of a sells shares of itself to the public to raise capital. product that is available. 2. A/An ______________ is when the prices of 19. A/An ______________ is a loan, or an I.O.U., that stocks are generally rising. investors make to corporations and governments which pays interest over a fixed period of time. 3. A/An ______________ is when the prices of stocks are generally declining. 10. How much of a product or service that is in ______________ can affect the stock price. 4. A professional who is licensed to buy and sell stock is a/an ______________. KEY TERMS 5. When you own ______________ in a company, you are a shareholder. Stock Supply 6. From its profits, the Board of Directors of a Bond Demand company can declare a/an ______________ to be Bear Market Stockbroker distributed among the shareholders. Bull Market Dividend 7. Money, also called ______________, is needed to Capital Initial Public Offering expand a company. © 2001 New York Stock Exchange, Inc.
  26. 26. Key Vocabulary __________________—A declining market ____________—The price offered by a willing buyer ___________—A rising market ___________—A firm or individual who arranges a transfer of securities between a buyer and a seller, charging a fee for the service. _____________________________—Profit or loss from the sale of a capital asset. ________________—Payment a company makes, in cash or stock, to its shareholders. _________________—A period during which the purchasing power of the dollar is declining. _______________—Payment to a creditor by a borrower for the use of money. _________________—The price at which transactions in a security take place. __________________—Typically consist of a group of stocks, bonds, or money-market securities from more than one source.  There are three types—income funds )for people who need money to live on); growth funds (pay low dividends or one—works best for investors who can leave money in the fund so it can grow over a long period of time;  and balanced funds (combination of stocks and bonds). ____________________________—The largest auction market securities in the nation.
  27. 27. _________________—All of the securities held by an individual, investment club or institution. _____________—Same as earnings or income. _________________—Synonymous with sales and receipts  ____________________—Synonymous with stockholder or shareowner, the owner of one or more shares of a corporation. ______________—Businesses need money to grow.  To get this money, some businesses sell shares, units of ownership of their company. _____________________—The issuance of a number of shares for each share of stock outstanding.  The common purpose of a split is to broaden ownership and increase marketability.   Vocabulary from Starting and running a Profitable Investment Club  by Thomas E. O”Hara and Kenneth S. Janke, Random House, 1998.
  28. 28. Campus Life, March/April 2001 Whose Money Is It, Anyway? How you handle your cash says a lot about what you value the most. by Larry Burkett We've all heard the basics about how to handle money: give some to church, save some, spend wisely, avoid debt, follow a budget, and so on. It's all part of "stewardship," a fancy word that means so much more than whether or not we put a certain amount into the offering plate on Sunday mornings. What does "stewardship" really mean? Larry Burkett, who's long taught Christians how to better handle their money, has been answering that question for years. Stewardship is more about our attitude than anything else. Here's how Larry explains it in one of his books: Most of us have an upside-down view of money. We figure the money we have is ours; God's money is just the portion we put in the collection basket. But God has a different view. As Lord and King, he owns everything—including the money we call our own. He has clear ideas of what he wants us to do with his money. We need to manage money according to God's plan. I've come up with five steps to help you do this: Step 1: Give It All to God God has placed the toughest step of all right at the front. Once you accomplish this step—admitting that he owns everything—all the others will fall into place. Here's why. God expects us, as Christians, to transfer ownership of every possession to him—money, time, parents, brothers, sisters, girlfriends, boyfriends, education, and things like cars, clothes, and other possessions. Did I leave anything out? If I did, add it to your list. God expects it all. In fact, if you believe you own anything, that will affect your attitude.
  29. 29. It's important that you gain the proper understanding of stewardship. By Webster's definition, a steward is "one who manages another's property." We are merely stewards of God's property while we're here on Earth. God will not force his will on us. If we transfer everything to God, he will keep his promise to meet every need we have through physical, material and spiritual means. There is absolutely no substitute for this first step. Step 2: Don't Overspend First, you need to have a written plan of all the stuff you're thinking about buying, in order of importance. Determine whether each thing is a need, a want or a desire. Needs are obvious—things like food and clothing. Wants can also appear awfully important. You may need a new pair of jeans, but does it have to be the most expensive kind? That's the difference in a need and a want. Desires are tougher to define. They don't exactly seem like needs, but they could—if you rationalize them. Maybe the old clunker you're driving works fine, but if you got a new car, you wouldn't have to worry about it breaking down. There's nothing wrong with desiring nice stuff. But if it rearranges your priorities, takes your attention from what's important, and gets you into debt, you're in trouble. Second, open a savings account and put something into it every week or every month, regardless of how much. The amount isn't nearly as important as the act of doing it. Step 3: Tithe Regularly Every Christian should tithe as a minimum testimony to God's ownership. God wants you to give back to him the first part of what he has given you: "Honor the Lord with your wealth, with the firstfruits of all your crops" (Proverbs 3:9).
  30. 30. The amount of your tithe is between you and God. What's important is that, just like with your savings account, you're regularly giving to your church, a charity and/or someone in need. Step 4: Don't Overdo It Most of us rarely pass up a want or a desire, much less a need. We need to learn to control those wants and desires by refusing to give in to them—and to give them to God instead. We must, as the Bible says, "deny ourselves" and follow Christ (Luke 9:23). Step 5: Avoid Snap Decisions You're always going to be tempted to buy stuff and make quick financial decisions—through advertising, through peer pressure, through your own wants. Resist the urge to splurge. The Bible says "the plans of the diligent lead to profit, as surely as haste leads to poverty" (Proverbs 21:5). Want to dig into more practical advice for handling money? Then check out Larry's Money Matters for Teens workbooks, for ages 11-14 and 15-18. You can find the workbooks ($10.95 each) at Larry's Web site: Copyright © 2001 by the author or Christianity Today International/Campus Life magazine. Click here for reprint information on Campus Life. March/April 2001, Vol. 59, No. 8, Page 46
  31. 31. Stock Market Tutorial Name _________________________ Date __________________ Go to Edustock on the Internet  Select "The Stock Market" from the menu and answer the questions. The Beginning: 1. What was traded at Trinity Church in Manhattan 200 years ago? Why?     2. How did "bonds" come into existence?     3. In what year was the New York Stock Exchange (NYSE) started?   4. What was the purpose of the NYSE?     5. What is AMEX and how did it get started?     How It Works: 1. What is a "share" of stock?     Copyright © 1999 - 2000 PBS 45 & 49
  32. 32. 2. What is a brokerage house?     3. What is the procedure when you choose to buy a stock?   Mutual Funds: 1. What is a mutual fund?   Rules: 1. What is the Securities Exchange Commission (SEC)?   Crashes: 1. What is a stock "crash?"   Market Trends: 1. List five reasons why the stock market goes up and down? 1. 2. 3. 4. 5. What is a Stock?: 1. What is a stock?
  33. 33.     2. What is a proxy ballot?     4. What are the three types of stock and how do you distinguish them? 1.   2.    3.   Types of Stocks: 1. What is a common stock and why is what the company does important to this type of stock?      Buying and Selling 1. What is the difference between publicly and privately held corporations? Copyright © 1999 - 2000 PBS 45 & 49
  34. 34. HOW TO READ Yld%: The yield, or rate of return, Sales 100s: The total amount of stock High: The highest price paid Last: The last price paid for TOCK on a stockholder’s investment. traded during the previous for the stock during the stock at the end of S It is figured by dividing the day. This example shows the previous day. the previous day. annual dividend by the current that 1,558,400 shares of price of the stock. this stock changed hands. TAB LES 52-Week Yld Sales High Low Stock Div % P/E 100s High Low Last Chg 63.88 35.31 XYZ Comm 1.76 3.9 15 15584 45.73 44.58 42.20 -0.07 52-week high and low: P/E: Change: The highest and lowest Low: prices paid for the stock Div: Short for price/earnings ratio. The price of a share The lowest price paid for the stock during The difference between the last trade and the during the past year. Short for dividend. A dividend is when a public company of stock divided by the the previous day. previous day’s price. decides to pay a portion of company’s earnings per its profits to stockholders. For share for the last year. each share of stock owned, a shareholder should receive $1.76 from the company’s annual profits. Stock: The name of the company. Every stock traded on a securities In 2001, the NYSE became the first U.S. market also has a symbol. Some market to become fully decimalized, newspapers list an abbreviation trading in dollars and cents instead of the company’s name instead of the symbol. Many financial of fractions. websites let you type in the stock symbol or the company’s name Today, many people also read stock to find out its symbol. tables in real-time format on the Internet. Grateful acknowledgment to The New York Times, an NYSE-listed company, for allowing us to use their Business Section to show how NYSE stocks are listed. © 2001 New York Stock Exchange, Inc. Created by Lifetime Learning Systems, Inc.
  35. 35. Understanding STOCK TABLES Activity 3 STOCK TABLES keep investors up-to-date on what’s happening in the market. Stock tables, both the electronic versions on the Internet and long columns of small print found in newspapers, provide information about the stock of publicly traded companies. Here’s an example of a stock table for XYZ Communications that might be found online. XYZ COMMUNICATIONS SYMBOL: XYZ LAST TRADE CHANGE 105.28 +0.33 TODAY'S OPEN HIGH LOW VOLUME 105.00 105.80 103.35 3,976,700 SHARES OUTSTANDING PREVIOUS DAY'S CLOSE 52-WEEK HIGH LOW 1,737,418,000 104.95 134.94 80.06 PRICE/EARNINGS RATIO: 21.77 INDICATED ANNUAL DIVIDEND: 0.56 YIELD (%): 0.53 DIRECTIONS: After reading the stock table, answer the following questions: 1. How much would you pay if you had bought 100 shares 4. What would the total dividend be on 300 shares of XYZ at the last sale? of XYZ? _____________________________________________ _____________________________________________ 2. What was yesterday’s closing price for XYZ? 5. If you bought 100 shares of XYZ at the lowest price of _____________________________________________ the year and sold it at the highest price of the year, how much money would you make (excluding any taxes or 3. How many shares of XYZ were traded since the market commission fees)? opened this morning? _____________________________________________ _____________________________________________ © 2001 New York Stock Exchange, Inc.
  36. 36. Yahoo! Finance Activity Name _____________________________ Date __________________ Use to find the answers. Symbol Look Up Type in the name of the company. Write their stock market symbols on the line following the company name. Coca-Cola ___________ Home Depot _______________ Hershey ____________ Walt Disney Co. _______________ Nike ____________ Apple Computers _______________ Quotes & Info Type in the symbol SLR. Answer the questions below from the information given on the Quotes and Info page. What is the current “Last Trade”? ________________ What does that mean? ________________________________________________ What was yesterday’s close? ___________________________________________ Has the price gone up or down today? _______________ By how much? ____________ What is the most this stock has sold for in the past year? ______________ What is the least it has sold for? _______________ More on SLR (sidebar links) Historical Prices: What was the closing price on July 14? ____________ What was the opening price on March 10? _________ Based on what you have seen, what do you predict the price will be in 1 month? _______
  37. 37. Headlines: What are three things that have happened to Solectron in the past month? 1. ___________________________________________________________ 2. ___________________________________________________________ 3. ___________________________________________________________ Company Profile: How many employees does Solectron have? _________ What does Solectron do? (business summary) _________________________________________________________________ __________________________________________________________________ Click on “ratio comparisons.” What is Solectron’s BETA? _______ Is this a risky investment? __________ Competitors: List three competitors of Solectron. 1. ____________________________ 2. ____________________________ 3. ____________________________ Finances: Income Statement What was Solectron’s Net Income as of August 31, 2003? _________________
  38. 38. Research a Company Write a one-page biography of a company that Mr. Ezell will assign you. You will give your report orally to the class next week Friday (Date). You will hand in a hard copy of the report to Mr. Ezell. You will need to include the following information in your report:  What do they do?  Mission Statement  Competitors  History of the company  Summary of their income statement/balance sheet from the past year  Would you recommend buying this stock? Why or why not?
  39. 39. STOCK OWNERSHIP:  A DELICIOUS TOPIC  Name________________________                        Date ________________________      Toad is Maria's best friend, but sometimes his impractical schemes are a bit much, even for Maria.  Yesterday was a good example.  He embarrassed her at McDonald's just because he was ignorant about stock ownership and insects.      Stock ownership and insects?  Yes.  It all started when Toad stopped by Maria's house and asked her to go to lunch at McDonald's.  "Nothing like fries and a burger and something special for lunch," he said, as they walked over ot the local Golden Arches.      "Something special?"  she asked.  But he just ignored her as he hopped along, carrying a carefully folded brown bag.      At the restaurant, Toad offered to buy lunch.  He asked maria to find a table and to guard his brown bag.  "Don't look inside, it's a surprise," he said.  That should have been enough warning, Toad buying lunch and asking her to guard a brown bag; but she just went along with everything because he brain was temporarily locked in the numb position.      Shortly he joined her at the table with the food and a sour mood.  "What is the matter?" she asked.  "Didn't they give you good service?"      "Oh, yes," Toad grumped, "but apart from the service she was so uncooperative!  I said I wanted to see the owner about this great idea of mine, but she said she was the local franchise owner.  I said, 'so you own all the McDonald's in the world?' And she said, "No, it is impossible to talk to those owners.'  Then she started waiting on the next customers.  She's so rude!"  Toad moaned.      "Actually," Maria replied, "she is right.  There are 226,656 owners of McDonald's.  Maybe you should become an owner."      "That's a great idea," Toad replied.  "Then I could have the restaurants serve my favorite foods and I could eat free.  If I own the business, then I get to run it my way, right?"      "Not exactly," Maria replied.  "I learned a lot about ownership and business by surfing the Internet.  If you want to become a part owner of McDonald's, all you have to do is buy stock in that company.  You become a part owner of the company, but many other people will also have bought stock in the company.  So you are only one of many people who share its ownership.  That's why stocks are called shared."      "But I could only eat a tiny share of all the food McDonald's cooks each day," said Toad.  "As a part owner, couldn't I eat part of their food?"
  40. 40.      "No, you couldn't.  McDonald's has close to 694 million shares of stock.  That means that the ownership of every hamburger McDonald's produces is really divided into 694 million parts.  If you buy one share of stock then you would own one of 694 million parts of each hamburger."      "That's hard to imagine," said Toad.  "That little bit wouldn't fill me up."      "And the same would be true for the company's buildings, stoves, and furniture.  You would own only one 1/694 millionth of each thing."      "Well, maybe I could decide what food to put on the menu if I were an owner of McDonald's stock," Toad said.  "They are really missing a sure bet by not offering a more varied menu."      "Actually, you can't do that either," Maria replied.  "For each share of stock, you get one vote for the company's top managers, or directors.  With so many owners or stockholders, you by yourself would not have a big influence on what the company offers as its menu.  Actually, managers run the company for you and the other stockholders."      "So what would I get for buying a share of stock in the company?" asked Toad.  "It doesn't sound  like much of a deal to me."      "Each share of ownership entitles you to some of the profits the company earns," she explained.  "But profit is not a sure thing.  If people don't like the food, the company wouldn't earn enough money to cover the costs and earn a profit.  Any business is risky because the future is uncertain.  A company could spend lots of money for buildings, equipment, or developing a  new product.  But if customers don't like the product or if prices are too high or products of other restaurants are more attractive, business income will be too low.  Success is never a sure thing, so there is always a chance of loosing your money.  Any business is risky and someone has to bear that risk.  That's what stockholders do as owners of a business."      "Sounds exciting," said Toad.  "So why buy a stock and risk losing money?"      "Because you can make a gain also.  You think the business will earn a profit on the product, so you take the risk.  The possibility of earning a profit gives the owners and managers of a  business an incentive to produce something consumers want to buy at a price they are willing to pay.  If the business succeeds, its owners will earn a profit.  That is the reward stockholders get for risking their money.  Customers also benefit because they get something they like.  Employees of the business benefit because they have a place to work and earn income.  It's like they're all on one big team with the same goal.  But owners are the only ones who risk their own money on whether the goal is accomplished."      "So by buying a stock," Toad said, "I become a business owner who takes part of the risk that the company might fail.  But if the company succeeds, I may get some of the