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Biblioteka

3.03BM What is a Stock?

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Posljednje ažuriranje 9 months ago
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Learning Objectives

Students will be able to:

  • Explain what stocks are and how they can make money from investing in them

  • Identify ways to minimize risk when investing in stocks

  • Read a stock quote and evaluate a stock’s performance over time

  • Understand what a stock split is and how it impacts investors who own that stock

National Standards for Personal Financial Education

 Investing

  • 2b: Compare nominal annual rates of return over time on different types of investments, including cash flows and price changes

  • 3b: Investigate the long-run average rates of returns on small-company stocks, large-company stocks, corporate bonds, and Treasury bonds

  • 5a: Describe factors that influence the prices of financial assets

  • 5b: Predict what could happen to the price of a stock if new information is reported about the company or its products

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Learning Objectives

Students will be able to:

  • Explain what stocks are and how they can make money from investing in them

  • Identify ways to minimize risk when investing in stocks

  • Read a stock quote and evaluate a stock’s performance over time

  • Understand what a stock split is and how it impacts investors who own that stock

National Standards for Personal Financial Education

 Investing

  • 2b: Compare nominal annual rates of return over time on different types of investments, including cash flows and price changes

  • 3b: Investigate the long-run average rates of returns on small-company stocks, large-company stocks, corporate bonds, and Treasury bonds

  • 5a: Describe factors that influence the prices of financial assets

  • 5b: Predict what could happen to the price of a stock if new information is reported about the company or its products

QUESTION OF THE DAY: If you invested $1,000 in Netflix stock ten years ago, what would it be worth now? 📷5 min

Answer the question on the first slide in the space below. Then, compare your answer to the answer on the second slide. Finally, follow your teacher’s directions on how to answer the follow-up questions on the last slide.

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VIDEO: Investing Basics: Stocks

If you want to grow your wealth, investing in stocks is a great option. Watch this video to learn more about what stocks are, how they work, and what you can do to minimize your risk when investing in stocks. Then, answer the questions.

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ARTICLE: How to Read a Stock Quote

REFERENCE: Stock Performance - Nike 📷10 min

To understand if a particular stock is a good investment option for you, you’ll need to know how to read a stock quote so you can evaluate its performance. Read through this article to learn how to read a stock quote. Then, review the stock quote and answer the questions.

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According to the article, why is it more useful to look at the percent change of a stock price, rather than the change in dollar amount?

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Look at the stock performance for Nike. Describe the trend in Nike stock prices over the last year. What about the last 5 years?

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Company B’s stock price is $500. You overhear a classmate say, “Based on the stock price, Company B’s value is clearly higher than Nike’s!” Why might your classmate be wrong?

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FINCAP FRIDAY: Stock Split Summer 📷9 min

Sometimes, a company will announce a stock split. So, what does this mean for you as an investor? Go through this FinCap Friday to find out! As your teacher progresses through the slides, answer these questions, just writing A, B, C, or D for questions 1 - 5.

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You’ve been interested in investing in Company C for quite some time. You’ve done your research and you’re ready to invest. Coincidentally, Company C just announced a stock split. Why might this be good news for you?

PROJECT: 5 Stocks on Your Birthday

Part I: Pick 5 Companies

Imagine it's your 10th birthday, and your wealthy Grandma’s buying you 100 shares in a single company. Choose 5 public companies you could have picked back then that still exist today. Make sure they were around on your birthday and are still active now - no bankrupt companies allowed!

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Part II: Track the Prices

  1. Follow these steps to track the prices of the 5 companies’ shares yearly on your birthday.

  2. Open the Stock Tracker, spreadsheet

  3. Open Yahoo! Finance in another tab

  4. Enter Company 1’s name in cell C1, its Yahoo! Finance link in C2, and its “Adj. Close” price on your 10th birthday in C3.

  5. Add the Adj. Close Price on your birthday to the table in column C starting with the year you turned 10. Then, look up every additional year until the current year.

Notes:

  • If your birthday wasn’t a trading day, use the closest previous day’s price

  • If your birthday hasn’t happened this year, use the latest Adj. Close Price available

Your chart for Company 1 might look something like this:

  1. Use the tabs at the bottom of the spreadsheet to complete the same for Companies 2-5.

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This file is linked in your google cassroom assignment. Did you find and open it there?

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Use the tabs at the bottom of the spreadsheet to complete the same for Companies 2-5.

Let me know here if you have any questions.

Pic of the tabs below: Click on each tab to open the sheet.

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Exit Ticket:

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What is a stock?

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Part III: Compare the Stocks

  1. Go to the “Stock Comparison” tab in your spreadsheet and follow the How To video to create a single graph with all 5 stocks’ data

NOTE: Your stock values will automatically carry over from the other tabs, so skip this setup step in the video. ** Any questions?**

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Part IV: Write a Stock Report

  1. Now that you’ve got some great graphs for comparison, go back to your google classroom and open your copy of the STOCK REPORT. Write a brief report summarizing which stock would have been the best choice on your tenth birthday.

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When reading a stock quote, which of the following metrics would give you the best idea of the total value of the company?

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Which of the following is TRUE about a stock split?