Chapter 16 Stocks and Bonds
What is stock? <ul><li>A share of a company that gives the purchaser part ownership in the company  </li></ul>
What is the Dow? <ul><li>Dow Jones Industrial Average (DJIA)  – the most widely cited indicator of day-to-day stock market...
Some stocks listed on the DJIA <ul><li>AXP – American Express </li></ul><ul><li>BA – Boeing </li></ul><ul><li>C – Citigrou...
What is a dividend? <ul><li>A share of the profits of a corporation distributed to its stockholders  </li></ul>
Mutual Funds <ul><li>Another way for people to invest in the market, a mutual fund is a collection of stocks that is manag...
Translating Stock Market Talk <ul><li>After the bell  – refers to the time after the bell sounds and the stock market clos...
Bonds <ul><li>An IOU, or a promise to pay, issued by companies, corporations and the government for the purpose of borrowi...
Things you should know about Bonds <ul><li>Face Value (Par Value)  – dollar amount specified on the bond.  The total amoun...
Example of how a bond works <ul><li>Example:   Jimmy buys a savings bond with a face value of $10,000 that matures in five...
School House Rock <ul><li>Walkin’ on Wall Street </li></ul>
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Chapter 16

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Chapter 16

  1. 1. Chapter 16 Stocks and Bonds
  2. 2. What is stock? <ul><li>A share of a company that gives the purchaser part ownership in the company </li></ul>
  3. 3. What is the Dow? <ul><li>Dow Jones Industrial Average (DJIA) – the most widely cited indicator of day-to-day stock market activity. The DJIA is a weighted average of 30 widely traded stocks on the New York Stock Exchange. </li></ul>
  4. 4. Some stocks listed on the DJIA <ul><li>AXP – American Express </li></ul><ul><li>BA – Boeing </li></ul><ul><li>C – Citigroup </li></ul><ul><li>KO – Coca Cola </li></ul><ul><li>HD – Home Depot </li></ul><ul><li>MCD – McDonalds </li></ul><ul><li>PG – Proctor and Gamble </li></ul><ul><li>WMT – Wal Mart </li></ul><ul><li>DIS – Walt Disney </li></ul>
  5. 5. What is a dividend? <ul><li>A share of the profits of a corporation distributed to its stockholders </li></ul>
  6. 6. Mutual Funds <ul><li>Another way for people to invest in the market, a mutual fund is a collection of stocks that is managed by a fund manager. It is up to the fund manager to do what he or she thinks is best to maximize returns. </li></ul>
  7. 7. Translating Stock Market Talk <ul><li>After the bell – refers to the time after the bell sounds and the stock market closes for the day </li></ul><ul><li>Bull market – a market in which prices are expected to rise </li></ul><ul><li>Bear Market – a market in which prices are expected to fall </li></ul><ul><li>Deer Market – a flat market where not much is happening </li></ul><ul><li>Lemon – a bad investment </li></ul><ul><li>Nervous Nelly – an investor who isn’t comfortable with investing, mainly because of the risks </li></ul>
  8. 8. Bonds <ul><li>An IOU, or a promise to pay, issued by companies, corporations and the government for the purpose of borrowing money </li></ul><ul><li>It provides another outlet for people to invest their money </li></ul>
  9. 9. Things you should know about Bonds <ul><li>Face Value (Par Value) – dollar amount specified on the bond. The total amount the issuer of the bond will repay to the buyer of the bond. </li></ul><ul><li>Coupon Rate – the percentage of the face value that the bondholder receives each year until the bond matures </li></ul><ul><li>Maturity Date – the day when the issuer of the bond must repay the face value to the buyer of the bond </li></ul>
  10. 10. Example of how a bond works <ul><li>Example: Jimmy buys a savings bond with a face value of $10,000 that matures in five years and has a coupon rate of 10%. Each year, Jimmy will receive $1,000 from the issuer of the bond until the bond matures. When the bond matures, he will receive $10,000. Therefore, Jimmy receives $5,000 for his five year $10,000 investment </li></ul>
  11. 11. School House Rock <ul><li>Walkin’ on Wall Street </li></ul>

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