Stocks and Bonds

1
Stocks and Bonds

• Invest To use money to earn interest or income
  in the hopes of making a profit.
• What are some examples of investments?
  __________________________________________________
  __________________________________________________
  _____
• Why do people want to invest money?
  ___________________________________

2
What are stocks?

• Stocks are shares in a corporation.
• A business sells stocks to people to get money.
  In return, the people own part of that business.
  It is good for the company and the stock holders.
  

3
Stock Dividends

• Preferred Stock Stock that offers the
  stockholder stated dividends / no voting rights
• Example General Motors
• Common Stock Stock that gives the stockholder
  voting rights. May or may not get dividend
• Example Smaller businesses

4
Buying and Selling Stock

• People can buy stock for a certain price and then
  sell it at a higher price.
• What are these stocks? ___________________________
  ___________________________________________
• Where can you buy them? __________________________
  ____________________________________________

5
Where to buy and sell stocks

• Stockbroker A person who is licensed to buy and
  sell stocks for other people.
• They handle the sales middle man
• Stock Market A place where stocks and bonds are
  traded.
• In the US New York City

6
Gains and Losses

• Capital Gain Profit made on selling stocks
• Example If you buy 10 shares of K-Mart stock at
  10 a share. You sell in 3 years for 20 a
  share. What is your capital gain? __________
• Capital Loss Money lost from investment
• Example If you buy 10 shares of K-Mart stock at
  10 a share. You sell in 3 years for 5 a share.
  What is your capital loss? ___________

7
Bonds

• Basically an IOU
• The person who buys the bond is lending money to
  the government or corporation that sells the
  bond.
• The person earns interest.

8
Securities and Exchange Commission

• Government agency that regulates the trading of
  stocks and bonds.
• Tries to prevent people with inside information
  from making money unfairly.

9
Reading the Stock Report

• Name of stock (pf means preferred)
• 52 week high/low Shows the high and low prices
  for the last 52 weeks
• Div Annual dividend paid per share
• Sales Hds Sales in hundreds (shares traded that
  day)
• Last Price when market closed
• Net Chg Increase or decrease in price from
  previous day.

10
Classwork

• 1. Page 97 1-9
• 2. Personal Economics
• 3. Look at a newspaper stock report and complete
  the worksheet.