Transcript Stock - EnglishTeachur

What is a stock?
Private ownership is
fundamental to the
operation of a market
economy. This lesson
introduces the idea
individuals can become
owners of a business
by purchasing stock.
People who buy stock
in corporations are
owners of that
corporation. They risk
their money (personal
wealth) on the success
of the business.
Any business is risky
because the future is
uncertain. The owners
of the business bear
that risk. If the
business succeeds, the
owners benefit.
Economize: To base
decisions on an
assessment of costs
and benefits, choosing
the best combination of
costs and benefits from
among the alternatives.
Ownership: The right to
use something and
enjoy its benefits.
Profit: The difference
between revenues and
the costs entailed in
producing or selling a
good or service; it is a
return for risk-taking.
Risk: The chance of
losing money. Risk is
the opposite of safety.
Stock: A share of
ownership in a company.
Owners of stock receive
part of the company's
profits – or bare some of
its losses – up to the
amount of money they
put into the stock.
Effective decisionmaking requires
comparing the
additional costs of
alternatives with the
additional benefits.
Most choices involve
doing a little more or a
little less of something:
few choices are "all or
nothing" decisions.
People respond
predictably to positive
and negative
incentives.
Entrepreneurs are people
who take the risks of
organizing productive
resources to make goods
and services. Profit is an
important incentive that
leads entrepreneurs to
accept the risks of
business failure.
Why do people like to
own things?
Private ownership is a
powerful incentive. It
allows people to enjoy
the benefits of what
they own.
Can people legally do
anything they want
with items they own?
Can you drive on the
left side of the road
with your car legally in
the U.S.?
Can you use your
clothes to tie up a
student and lock him or
her in a locker?
Can you use your books
to start a fire in
someone's living room?
Can you use your
makeup to color over
the computer monitor
screen in school?
Then what does
ownership mean?
It establishes who gets
the benefits associated
with the items and who
bears the responsibility
for what happens with
them.
You get to drive your car
– no one else may
without your permission
– but you are
responsible for driving
legally and answering
for any harm you cause
when you use the car.
Ownership means that
privileges and
responsibilities are
clearly defined.
1. A stock is a
fractional share of
ownership of a
business.
2. Stock owners are
entitled to a share of
a company's profits.
3. There is risk in
owning any company,
and stockholders share
that risk.
4. Introducing a new
product is a risky
venture for companies.
NYSE/NASDAQ Made
Easy
Definitions:
The following terms
can be found on a
stock ticker.
FINDING FINANCIAL INFORMATION
ONLINE
Stock:
the shares of a
particular company or
corporation.
Mutual Fund:
an investment company
that issues shares
continuously and is
obligated to repurchase
them from
shareholders on
demand.
Bond:
a sealed instrument
under which a person,
corporation, or
government guarantees
to pay a stated sum of
money on or before a
specified date.
SPRINT NEXTEL CORP
As of 22-Dec
OVERVIEW
Price:
118.00
Coupon (%):
9.250
Maturity Date:
15-Apr-2022
Yield to Maturity (%):
6.884
Current Yield (%):
7.839
Rating from Rating Service:
BB
Coupon Payment Frequency:
Semi-Annual
First Coupon Date:
15-Oct-1992
Type:
Corporate
Callable:
No
Exchange:
An organization that
provides a market
place for the trading of
a listed stock. The New
York Stock Exchange
and Nasdaq are the
biggest in the U.S.
F - Ford Motor Company
(NYSE)
F - Ford Motor Company
(NYSE)
$10.18: -0.25 (-2.40%)
Last: Current trading
price of one unit of a
particular security
(stock).
Oct 19 4:00pm ET –
Open: $10.42
(Open: The price paid
in a stock's first
transaction of the
current trading day.)
High: $10.43
(Day’s High: The
highest price of the
stock during the
current day's trading.)
Low:
$10.13
(Day’s Low: The lowest
price of the stock
during the current
day's trading.)
Volume: 40,496,019
(Total number of shares
that have been traded
on the most recent
trading day.)
Avg. Vol.: 37,667,000
Mkt. Cap: $38.83B
Market Cap: The value
of a company's
outstanding shares.
This is determined by
multiplying the number
of shares issued by the
current price per share.
Change:
The difference
between yesterday's
closing price and the
most recent price
(last).
% Change:
The percent change in
the price of the stock
versus the price at
close from yesterday.
Previous Close:
The price of the stock
at the end of
yesterday's trading
session.
Bid:
The price at which
someone is willing to
buy a stock. This is
what you get when you
sell the stock.
Ask:
The price at which a
holder of a stock is
willing to sell.
52 Week High:
The highest price for
an individual share of
stock during the past
year.
52 Week Low:
The lowest price
for an individual share
of stock during the
past year.
Price/Earnings:
This is the latest
closing price divided by
the latest 12 months'
earnings per share.
Earnings/Share:
Total earnings divided
by the number of
stocks issued.
Dividend/Share:
The cash payment per
share made by the
company to its
shareholders.
Current Dividend Yield:
The yield on a given
investment based on its
current price. You can
calculate this by
dividing the dividend
paid for the year into
the current price.
# Shares Outstanding:
The number of shares
that have been issued
and are in hands of the
public.
WHAT IS A
STOCK?
Stock Questions: True
or False?
1. Stocks represent
ownership in a
corporation.
2. People who invest in
stocks cannot lose
their money.
3. Mark bought 100
shares of Intel stock.
Each share sold for
$35.50. If no fees were
involved, Mark paid
$3,550 for the shares.
4. The price people pay
for a stock is called a
dividend.
5. The closing price for
a share of Wal-Mart
stock was $37.25. This
means that the price of
the share was $37 and
one-quarter of a dollar.
One quarter of a dollar
is $0.20.
6. People who own
stocks are guaranteed
a return on the money
they have invested in
stocks.
7. The only way
stockholders make
money is through
dividend payments
while they own the
stock.
8. One way
stockholders make
money is by selling
their stock for more
money than they paid
for it.
9. Stockholders can
reduce the risk on their
stock investment by
diversifying their
portfolios.
10. The New York
Stock Exchange is the
only place where
people can buy and sell
stocks.
Mrs. Colvin’s