A stock is a share in the ownership of a company, and it represents a claim on the company’s assets and earnings. Public corporations allow any investors to buy shares in their company via a stock market exchange. Investors can earn money on a stock through dividend yields (profit sharing) and capital appreciation (equity reselling); however, investors can also lose money through poor investments. For the next few weeks, our class will be trading stocks on the real-time stock exchanges (NYSE, NASDAQ and TSX) using virtual money.
Task 1: Background on Stocks
- Review the Stock Basics articles on Investopedia. By reading the articles, students will be able to:
- Define stocks in their own words.
- Identify advantage of equity financing (e.g. stocks) over debt financing (e.g. bonds)
- Compare the two types of stocks: common vs preferred.
- Identify the two major stock exchanges in the United States and the type of companies in each one.
- Understand what causes prices to increase (or decrease).
- Read the section called “Required Vocab” on Stock Lesson (pp.1-4) on HowTheMarketWorks.com. In addition to earlier vocabulary, students will be able to define:
- initial public offering (IPO)
- stock exchange
- stock broker
Task 2: Research on Your Stocks
- Read the section called “Buy What You Know” on Stock Lesson (pp.5-7) on HowTheMarketWorks.com.
- Complete the table on page 7 by choosing at least 10 companies whose products you might purchase.
Task 3: Practice Trial
Before the actual contest, students will have the opportunity to practice buying and selling stocks based on the rules:
- Initial Capital: $10,000
- Stock Exchanges: NYSE, NASDAQ, TSX
- Min. Number of Companies: 3
- Min. Number of Transactions: 5
- Commission Fees: $25 per transaction
- Length: 1 week
- Link: TBA
Task 4: Business 10 Stock Market Challenge Contest
- Same as above unless noted below.
- Length: 2 months (ends Feb. 13)
- Link: TBA