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Problem of the day….

Problem of the day…. What is an IPO?. Problem of the day…. The bank returns a check cashed by you because there was insufficient funds to cover the check. The check is called:. Stock Market Basics. Novice Level. Bought 100 Shares x $10.00 = $1,000 Sold 100 Shares x $20.00 = $2,000

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Problem of the day….

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  1. Problem of the day…. • What is an IPO?

  2. Problem of the day… • The bank returns a check cashed by you because there was insufficient funds to cover the check. The check is called:

  3. Stock Market Basics

  4. Novice Level • Bought 100 Shares x $10.00 = $1,000 • Sold 100 Shares x $20.00 = $2,000 • $2,000 - $1,000 = $1,000 • You gained $1,000 • Assuming no commission was taken by the broker

  5. Apprentice Level • Bought 155 Shares x $12.00 = $1,860 • Sold 155 Shares x $23.00 = $3,565 • $3,565 - $1860 = $ 1,705 • You gained $1,705 • Assuming no commissions

  6. Master Level • Bought 2,200 shares x $20.00 = $44,000 • Sold 2,200 shares x $18.00 = $39,600 • $39,600 - $44,000 = - $4,400 • Loss of $4,400 • Assuming on commission

  7. Grand Master • Bought 200 shares x $20.76 = $4,152 • Sold 100 shares x $ 23.67 = $2,367 • Sold 100 shares x $19.21 = $1,921 • $2,367 + $1,921 - $4,152 = $136 • You gained $136 • Assuming no commission

  8. Return on Investment • Percentage increase or decrease • New Number – Old Number / Old Number • (N – O) / O • Example: • $60.00 original number • $70.00 current number • Calculate percentage increase or decrease: • (70 – 60) /60 = 10/60 = • 16.67% gain

  9. Return on Investment • Beginning Balance of $5,000 in brokerage account • Don’t add or subtract from principal • Current Balance of $4,900 • Calculate return on investment • (4,900 – 5,000) / 5,000 = -100/5000 • = -2%

  10. Calculate Return on Investment Review: Go back and calculate the return on investment from the four previous problems: (novice to grand master)

  11. Answers • Novice: (2,000 – 1,000)/ 1,000 = 1,000/ 1,000= 100% • Apprentice: ( 3,565 – 1,860) / 1,860 = 1,705/1,860 = 91.67% • Master: (39,600 – 44,000) / 44,000 = • 4,400/44,000 = - 10 % • Grand master: (2,367 +1,921 – 4,152)/ 4,152 = • 3.28%

  12. Closure/ Homework Calculate the return on your investments in our stock market game Assume no commissions right now

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