investing
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InvestingTypes of
Businesses Bonds Vocabulary SMG Info
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Stock Market
List 4 ways that people can invest
their money.
1) Stocks
2) Bonds
3) Mutual Funds
4) Property
5) Education
Which type of investment is riskier,
stocks or bonds?
Purchasing Stocks is riskier because you are not guaranteed to make money. You could lose
everything you invested.
An investor who has purchased shares of
ownership in a corporation is called________________.
A Stockholder or Shareholder
When investing in the stock market
you should buy ________, & sell _________!
Buy LOW &
Sell HIGH!
What is the main purpose of investing?
The purpose of investing is to make your money grow. You are taking a risk in the hope
that you will make your money increase.
What is a sole proprietorship?
Give an example!
A sole proprietorship is a business owned by
1 person.
Example: doctor
What is a partnership?
Give an example!
A partnership is a business owned by
more than 1 person.
Example: Law firm
What is a corporation?
Give an example!
A corporation is a business organization owned by a group of
investors called stockholders.
Example: McDonalds
Which type of business is the only one that is public &
can be traded on the stock market?
Corporations
All businesses need investment capital. What is investment
capital?
Investment capital is the money
required to start a business.
What is the Dow Jones Industrial Average & why is it important?
The Dow Jones IA is the average value of 30 large industrial stocks. It is important because it helps us measure the overall health of the
market. It tells whether the market is strong and people are buying stocks & when the market is not
doing as well and fewer people are buying stocks.
Tell about the origins for the
terms Bull Market & Bear Market.
The terms :Bull Market & Bear Market were used to describe the
movement of the stock market based how the animals attack. A bull thrusts its horns Up into the
air, so this term is used to describe when the market is UP. A
bear swipes its paws DOWN, so this term is used to describe when the
market is DOWN.
What is a stock?
A stock is a share of ownership in a corporation.
Why might people invest in stocks?
-It can be a fast way to earn money
-Usually more lucrative than buying bonds
-You can earn dividends from
companies
Explain the difference between
Bull Market & Bear Market.
Bull market is a symbol that means the Dow Jones IA is up. It is a sign that the
market is strong and that people are confident & buying stocks. Bear
market is the opposite. It tells us that the Dow Jones IA is down. Fewer
people are buying stocks. They are not confident & stock prices are dropping.
True or False
A bond is like an I.O.U. or lending someone money.
True
True or False
Bonds are more lucrative (you can make more money) than
stocks are.
False
Name 2 Types of Bonds:
Corporate Bonds &
Government Bonds
Explain what a BOND is:
When buying a bond, you are lending a corporation or
government money. In return you get a certificate that
promises the corporation/government will pay you back the money plus
interest.
Why might people want to invest in bonds and not stocks?
Give 2 reasons.
-Bonds are a safer investment
-You get back the original amount plus interest
-Almost always guaranteed to make back the money
A share of a company’s profits paid to
stockholders is called a ____________.
Dividend
What is collateral?
Collateral is something of value that a borrower promises to a lender as a
guarantee that a loan will be repaid.
What is a stock exchange?
Give an example.
A stock exchange is a place where the
buying & selling of stocks takes place.
Example: NYSE
True or False
The stock market is a place you can go to buy things.
False!
What does speculation mean?
Speculation is your thoughts or guesses about something. In business it means taking a risk based
on your what you think will happen, in the hopes that
you make a profit.
Look @ the image above. What is the ticker symbol?
Ticker Symbol = K
Look @ the image above. What is the price per share?
Price per share = $52.84
Look @ the image above. What is the day high? Day low?
Day High = $ 53.08
Day Low = $ 52.70
Look @ the image above. If you bought 10 shares, how much would it
cost?
10 shares = $528.40
If the shares were $60.50 per share in 15 years & you sold all 10 shares.
Would you earn money or lose money?
You would make money
Make your wager
If you sold your 10 stocks of Kellogg for $60.50 per share, how much money would
you earn?
You would earn:
$76.60