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Slide 1: What Is a Stock? Lesson 4
Slide 2: Income, Saving and Investing • Households earn income. • Income is payments received by a household by selling or renting productive resources. • Households usually spend some of their income and save some of it. • Saving is income not spent on consumption or taxes. • Some households use their savings to purchase stocks. July 5, 2007 What Is a Stock? 2
Slide 3: Lesson 4 Visual 1 Mathematics and Economics Questions Question 1. Stocks represent ownership in a corporation. July 5, 2007 What Is a Stock? 3
Slide 4: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Answer 1. True. Stocks are shares of ownership in a corporation. July 5, 2007 What Is a Stock? 4
Slide 5: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Question 2. 50% written as a decimal is 5/100. July 5, 2007 What Is a Stock? 5
Slide 6: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Answer 2. False. 50% written as a decimal is .5. July 5, 2007 What Is a Stock? 6
Slide 7: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Question 3. Mark bought 100 shares of Nike stock, and each share sold for $35.50. If no fees were involved, Mark paid $3,550 for the shares. July 5, 2007 What Is a Stock? 7
Slide 8: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Answer 3. True. 100 x $35.50 = $3,550. July 5, 2007 What Is a Stock? 8
Slide 9: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Question 4. If Jenny has $100 in a savings account and earns 2 percent interest this month, she has earned $20 in interest. July 5, 2007 What Is a Stock? 9
Slide 10: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Answer 4. False. 2 percent of $100 = $2.00 July 5, 2007 What Is a Stock? 10
Slide 11: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Question 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 .20. July 5, 2007 What Is a Stock? 11
Slide 12: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Answer 5. False. The closing price for a share of Wal-Mart stock was $37 and one-quarter of a dollar. One-quarter of a dollar is .25, not .20. July 5, 2007 What Is a Stock? 12
Slide 13: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Question 6. People who own stocks are guaranteed a return on the money they have invested in stocks. July 5, 2007 What Is a Stock? 13
Slide 14: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Answer 6. False. Investing is stocks involves risk. Less risky investments are savings accounts and government bonds. July 5, 2007 What Is a Stock? 14
Slide 15: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Question 7. The only way stockholders make money is through dividend payments while they own the stock. July 5, 2007 What Is a Stock? 15
Slide 16: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Answer 7. False. Stockholders make money through dividend payments or by owning stocks that increase in value. July 5, 2007 What Is a Stock? 16
Slide 17: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Question 8. One way stockholders make money is to sell their stock for more than they paid for it. July 5, 2007 What Is a Stock? 17
Slide 18: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Answer 8. True. A common way for stockholders to make money is to sell their stock for more than they paid for it. July 5, 2007 What Is a Stock? 18
Slide 19: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Question 9. Stockholders can reduce the risk on their stock investment by diversifying their portfolios. July 5, 2007 What Is a Stock? 19
Slide 20: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Answer 9. True. A common way for stockholders to reduce risk is by owning stocks in a variety of corporations. July 5, 2007 What Is a Stock? 20
Slide 21: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Question 10. The New York Stock Exchange is the only place where people can buy and sell stocks. July 5, 2007 What Is a Stock? 21
Slide 22: Lesson 4 Visual 1 (Continued) Mathematics and Economics Questions Answer 10. False. In addition to the New York Stock Exchange, people may buy stocks on the American Stock Exchange and the NASDAQ. July 5, 2007 What Is a Stock? 22