New Fellow Education Transfer Plan Cover Sheet

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New Fellow Education Transfer PlanCover Sheet

Title of ETP Stock Market SimulationName of IISME Fellow Kent EzellFellow’s year-round email [email protected] Company SolectronName of Mentor Jennifer ShepherdNational Board CertificateArea

Middle School Math

I, the IISME Fellow named above, affirm that the ETP I am submitting is my own work, that Iacknowledged sources where appropriate, and that I avoided including any proprietary informationof the Sponsor Company. By my submission I am assigning to IISME my entire copyright in theETP. I understand IISME is simultaneously granting me a license to use the ETP for pedagogicalpurposes.

Signature Date

Category CurriculumSubject: MathLevel: Middle

Staff DevelopmentDescribe__________________________

OtherDescribe__________________________

Objectives See attached sheetAbstract (50 words or less) Students will learn basic Stock Market terminology. They will learn

how to buy and sell stocks, create formulas and graphs to tracktheir progress, and work a two-month simulation of stock markettrading. Emphasis will be placed on practical application to dailymath lessons as well as applying Biblical principles to MoneyManagement.

Describe how your ETPaligns with the NationalBoard Standard stated inyour proposal.

See attached sheet

D4

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Describe the connectionbetween your ETP and theSummer Fellowship. Solectron is a prominant figure in the Stock Market. Students will

use this company as a foundation for understanding howcompanies function in the stock market.

Throughout my fellowship I worked in a work world that was highlysophisticated. I began to see how my students would need to beable to use analytical thinking skills. I also spent extensive timeworking on the internet and with Excel spreadsheets. All of thesecomponents are woven into my Stock Market Simulation.

Resources NeededInternet AccessMicrosoft ExcelGraph paper

Evaluation/AssessmentMeasures Used

Pretest, Oral report, weekly assignments, Excel spreadsheets,graphs, final assessment test

Formatting specifications PC ____ or Mac__X_ (Must be in Word or Text Format)Software used Microsoft Excel

Submitted Copy Soft and hard copy due to peer coach by the end of the summerfellowship. Also, a copy of the cover sheet signed by a school siteadministrator submitted to IISME Oct.3, 2004 to receive $300 grant.

I, the Mentor named above [please select one of the following], have read the attached ETP, and my comments, if any, appear below. have read the attached ETP, and, as outlined in the IISME-Company Fellowship

Agreement, have reviewed it on behalf of the Sponsor Company, and have determined thatthe ETP does not contain any Sponsor-proprietary information. My additional comments, ifany, appear below.

Comments:

Signature Date

Administrator’s comments:

Signature Date

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Table of Contents

I. Scope and Sequencea. Student Objectivesb. National Standards

II. Lesson Plansa. Stock Market Simulation Weekly Lesson Plansb. Lesson Plans to Teach Excelc. How Does News Influence Stock Pricesd. NYSE Stock Market Savvy Lesson Plans

III. Student Pagesa. What is the Stock Market Pretestb. Stock Talk: Market Termsc. Key Vocabularyd. Whose Money is it, Anyway?e. Stock Market Tutorialf. How to Read Stock Tables posterg. Understanding: Stock Tablesh. Yahoo! Finance Activityi. Research a Companyj. Stock Ownership: A Delicious Topick. Worksheet for Graphingl. Market Cycles: What Drives Stock Pricesm. Final Assessment

IV. Teacher Answer Keysa. Answers for Key Vocabularyb. Stock Market Research Report List of Companiesc. Stock Market Company Oral Report Rubricd. Answers for Investing for Kids Tutoriale. Final Assessment Answer Key

V. Teacher Resourcesa. The Proverbs and the Idea of Moneyb. Explaining the Stock Market to Kidsc. What Money Can and Cannot Buyd. A Selection of Money Quotese. Vocabulary Matching Game Pieces

VI. Bibliography

Stock Market Student Objectives

1. Students will understand basic stock market terminology.

2. Students will be able to find and identify companies by name and symbol.3. Students will be able to chart the progress of specific stocks over a two-month

period of time.4. Students will be able to calculate and graph progress of specific stocks in a

simulation activity.

5. Students will be able to create formulas in an Excel spreadsheet.6. Students will find connections between in-class math work and applications in

real world situations.7. Students will use discernment and problem solving skills to choose stocks to buy

and sell.

8. Students will apply Biblical principles to their financial management.

NATIONAL STANDARDS

Numbers and Operations1. Understand Number

a. work flexibly with fractions, decimals, and percents to solve problems

2. Understand Meaningsa. understand the meaning and effects of arithmetic operations with fractions,

decimals, and integersb. understand and use the inverse relationships of addition and subtraction,

multiplication and division, and squaring and finding square roots tosimplify computations and solve problems

3. Compute Fluentlya. select appropriate methods and tools for computing with fractions and

decimals from among mental computation, estimation, calculators orcomputers, and paper and pencil, depending on the situation, and apply theselected method

b. develop and use strategies to estimate the results of rational-numbercomputations and judge the reasonableness of the results

Algebra1. Understand Patterns

a. represent, analyze, and generalize a variety of patterns with tables, graphs,words, and, when possible, symbolic rules;

b. relate and compare different forms of representation for a relationship;c. identify functions as linear or nonlinear and contrast their properties from

tables, graphs, or equations.2. Use Mathematical Models

a. model and solve contextualized problems using various representations,such as graphs, tables, and equations.

3. Analyze Changea. use graphs to analyze the nature of changes in quantities in linear

relationships.

Data Analysis and Probability1. Formulate Questions

a. formulate questions, design studies, and collect data about a characteristicshared by two populations or different characteristics within onepopulation

2. Develop and Evaluatea. use observations about differences between two or more samples to make

conjectures about the populations from which the samples were takenb. make conjectures about possible relationships between two characteristics

of a sample on the basis of scatterplots of the data and approximate linesof fit

3. Understand and Applya. use proportionality and a basic understanding of probability to make and

test conjectures about the results of experiments and simulationsb. compute probabilities for simple compound events, using such methods as

organized lists, tree diagrams, and area models

Problem Solving1. build new mathematical knowledge through problem solving;2. solve problems that arise in mathematics and in other contexts;3. apply and adapt a variety of appropriate strategies to solve problems;4. monitor and reflect on the process of mathematical problem solving.

Reasoning and Proof1. make and investigate mathematical conjectures2. select and use various types of reasoning and methods of proof

Connections1. recognize and use connections among mathematical ideas;2. understand how mathematical ideas interconnect and build on one another to

produce a coherent whole;3. recognize and apply mathematics in contexts outside of mathematics

Stock Market SimulationETP Presentation by Kent EzellLesson Plans (One day a week)

Week 1:

Introduce Stock Market Simulation. Highlight main ideas and objectives to becovered this semester. Make connection between math that is learned in class andreal world application.

Give the “What is the Stock Market” Pretest located in the student pages. Assign students to do the “Stock Talk” skit. Have students fill in the answers with

a partner. Go over the answers together as a class. Go over “Key Vocabulary” of the stock market. The vocabulary sheet is found in

the student pages. Have students fill in the words that match the definitions. Assign students to read “Whose Money Is It, Anyway” found in the student

pages.

Week 2

Discuss with the class what the Bible says about money. What were the stepsLarry Burkett laid out? How do they apply to our lives?

Students will need to use a computer with internet access. Have students read,“The Stock Market” found at http://libray.thinkquest.org/3088

Give students the worksheet “Stock Market Tutorial” found in the student pages.The information is found at the thinkquest website.

The worksheet is due next week Friday.

Week 3

Collect the worksheet from the students. Go over answers that are found in theteacher answer section.

Hand out “How to Read Stock Tables” posters. Talk through the different parts ofthe table with the students.

Have students complete “Understanding Stock Tables” on their own. Walkaround the room to check for understanding.

Take the students to the computer lab. Have the students log on to the websitefinance.yahoo.com. Have the student click on “Symbol Lookup.” Show the kidshow to find the symbol of the company. Type in Coca-Cola in the box. See howCoca-Cola’s symbol is “KO”

Have the students do the other five companies on the Yahoo! Finance worksheetfound in the student pages. hhhh

Highlight for the students the key features that they will be using. Have thestudents do the rest of worksheet “Yahoo Finance Activity.” Make sure thestudents each have SLR (Solectron) as the company on the screen.

Walk around the lab to make sure students are doing the worksheet correctly.

The worksheet is due next week Friday.

Week 4

Bring the students to the computer lab. Assign each student a company toresearch. Make sure the company is large but not one that the students wouldknow.

Tell the students that they will be giving an oral report on the biography of thecompany next week Friday, and they will need to give a hard copy to the teacher.

Explain why they are researching a company before they buy its stock. Use thequote from Peter Lynch - go with what you know. “During a lifetime of buyingcars and cameras, you develop a sense of what’s good, what’s bad, what sells,and what doesn’t. If it’s not cars you know about, you know something aboutsomething else. And the most important part is, you know it before Wall Streetknows it.”

Go over the instructions of worksheet “Research a Company.”

Week 5

The students will give their oral reports. Use the rubric in the teacher answersection to assess it.

Week 6

Students will need to work at a computer with Excel on it. To briefly explain how a spreadsheet works, go to http://www.school-

resources.co.uk/FramesForKS3SpreadsheetQuiz.htm. Work through labels,formulas, values, and symbols. Once students have a basic understanding of howa spreadsheet works, they will be able to create their portfolios.

Use the Lesson Plans “Teach Excel” to show students how to create formulas.They will be creating a Cash Balance Sheet and a Portfolios Sheet.

Week 7 Read “Stock Ownership” together as a class. Have students answer the questions. Discuss with students how to choose stocks. Remind them of Peter Lynch’s quote

– go with what you know. Students will need to pick between 7 and 10 stocks. Give students an opportunity

to use Yahoo Finance to research a variety of stocks. They will need to have theirstocks chosen by next week.

Week 8 Students will ‘buy’ their stocks. They will be choosing which stocks they want to

purchase and how many shares of each stock. There will be a $15 commission oneach buy or sell. Students will only be allowed to buy/sell on Fridays in class.

They will need to create a graph for each stock they purchase. Use “GraphingStocks,’ as a reference for instructions on how to graph. Have students use the 52-week highs/lows for setting up the range of their graph.

* Have a stack of graph paper available throughout the unit for students to pick up asthey purchase new stocks.

Each week students will plot their new points for each stock they own. As theysell, they will mark the selling price and date of sale. For each new stock theypurchase, they will enter the purchase price and date of purchase.

Weeks 9-20 Students will buy/sell stocks based on their productivity. Students will fill in their excel sheet and plot their graphs each week. These will

be turned in before they leave class on Friday and returned to them the followingweek.

Students will be encouraged to dialogue with their peers as to the success orfailure of their chosen stocks.

Week 21 Final Evaluation: Students will be assessed on their understanding of how to read

a stock market page, how to buy/sell stocks, and understanding of theterminology.

Enrichments to becompleted during weeks 9-20: How news affects the stock market – see Lesson Plans “How Does New

Influence Stock Prices” – teacher will need to create questions based on currentevents, samples are given in the lesson plans.

Fieldtrip to the San Francisco Stock Exchange Guest speaker – parent who is actively involved in the stock market. Explain

how he got involved, why he enjoys it, and any advice for students.

Lesson Plans to Teach Excel(The teacher should have a basic understanding of Excel to execute this lesson plan.)

1. Have the students open a blank Excel spreadsheet.2. The students should name their spreadsheet by doing a “Save As.” Call it

“Stock Market -<student’s name>”3. On the bottom of the spreadsheet, rename “sheet1” to “Cash Balance”

a. Click on the tab (it says Sheet1) using the right mouse button(Macintosh computers should click on the tab at the same timeholding down the “Control” key.)

b. Click on “rename sheet.”c. The tab should be highlighted which indicates that the tab is ready

to be changed.4. Rename “sheet2” to “Portfolio Balance”5.

Cash Balance Sheet6. Click the “Cash Balance” sheet tab.7. Title your sheet by putting the school’s name in box A18. Take your mouse and highlight the cells A1 through G1.

9. Then press the “merge and center” button. This should spread out yourTitle across the spreadsheet. You may have to extend or not extend asmuch over the cells if at the end of the lesson plan the title is not centered.

10. On cell A3, type in “Date”, A4 type “Description,” A5 type “purchaseprice,” A6 type in “Purchase Price,” A7 type in “Amount of SharesPurchased,” A8 type in “Total Cost of Purchase” and A9 type in“Balance”

11. Since the students have 100,000 to spend, type in 100,000 in F412. Put your pointer in-between column “A” and “B,” your pointer should

have changed into arrows. With your mouse held down, move the mouseto the right until it says “20.00.” Do the same for “purchase price,”“Amount of shares purchased” “Total Costs of Purchased” and “Balance,”but drag those until it says “15.00.”

13. In cell A5, put the date of purchase for a stock.14. In cell B5, put the description of the transactions. Since this is a cash

balance sheet. The description here should only be either purchased astock or sold a stock.

15. In cell C5 and C6, put in “purchase price” and “amount of sharespurchased”

16. In cell E5, put in the formula “=(C5*D5)” It is important to explain to thestudents how to make a formula, so that in the future the students will beable to make their own formulas.

a. All formulas start with the “=” signb. All formulas use the order of operations standardc. Have the students use parenthesis to make the formulad. Total cost of purchase is cell C5 times D5.

17. In cell F5, put the formula “=(F4-E5).” Teach the students how theformula works

18. Do the same for all the other stocks purchased.19. If stocks are sold put a minus sign in front of the amount of stocks sold.

For example, if 1000 stocks are sold, then the cell in the Quantity of stockscolumn should be “–1000.”

Portfolio Sheet20. Click on the “Portfolio Balance” tab21. Title the sheet like in the “Cash Balance” spreadsheet22. In row 3, put in each subsequent cell Date, Description, Quantity of

shares, purchase/sell price, current stock price, change in portfolio, andportfolio balance.

23. Set up the size of the cells like in the “Cash Balance” sheet24. Have students put in the date of purchase, description of the stock,

quantity of stocks they purchased, and the purchase price. (Leave Currentstock price alone for now).

25. In cell F5, teach the students the following formula, “=(C5*D5)”26. In cell E5, copy the amount from F527. Each week the student will monitor the progress of the stock. If the stock

changes, then an entry will need to take place. If the stock goes up, thenput the date and the description, and put into the “Current Stock” columnthe price currently.

28. Then put in a formula that looks like,” =(E6-D5)*C5” into “Change inPortfolio” column

29. Then in the “Portfolio Balance” column, put the following, “=(G5+F6)”

30. If the stock goes down, the formulas in “Change in Portfolio” and“Portfolio Balance” will not change. You will get brackets around thenumber in the “Change in Portfolio” to indicate that the number is in thenegative.

31. I suggest that you keep each purchase together. For example, if thestudent purchases 1000 shares of Microsoft, then have the subsequentlines be about how those 1000 shares are doing. See diagram below.

Microsoft Group Solectron Group

How Does News Influence Stock Prices?

Subjects: Economics, business, language arts, and social studies

Time Period: One class period

Resources: Internet access and/or newspapers

Objectives: Students will learn that economic news and business events can changethe price of a stock. They will see that the unexpected events that benefit or harm thecompany will in turn move the company’s stock price up or down. Certain internaland external factors will affect share prices. By learning about the relationshipbetween business events and share prices, students will be able to form a strategy inbuying and selling stocks for the Global Stock Game (GSG).

Background: A number of factors influence share prices.

Some internal factors include:• Earnings growth• Sales growth• Product release• Leadership changes• Lawsuits pending

Also, some external factors change the share prices:• New market competition• Economic news such as interest rates and inflation• Government policy changes

Activities:1. Teachers will select news from newspapers or Web sites like Yahoo!, MSN, CBSMarket Watch, and the Wall Street Journal interactive edition.

2. Next, the teacher will read the business news concerning a specific company orthe general economy to the students.

3. Then, the teacher will ask questions about how these events would influence theshare price of the company or the stock market in general. There will be four typicalanswers:• Share prices will likely increase• Share prices will likely decrease• Share prices will likely be unchanged• Not enough information to determine

Here are examples of news events and the likely responses.

After the meeting of the Federal Reserve’s open market committee, Chairman AlanGreenspan declared an increase of 0.25% in interest rates. Share prices of the realestate companies and home builders will likely: Answer• increase• decrease• unchanged• can’t determine

U.S. productivity sees 6.4% increase, the largest gain since 1992. Share prices ofGeneral Electric, IBM, and 3M will likely: Answer• increase• decrease• unchanged• can’t determine

1. Oil prices hit $34 per barrel, the highest since the Gulf War. Share prices of United,South West, and Delta airlines will likely: Answer• increase• decrease• unchanged• can’t determine

2. Judge Jackson rules that Microsoft has a monopoly on PC operating systems. Share price of Microsoft will likely: Answer• increase• decrease• unchanged• can’t determine

3. AMD begins shipping a microprocessor that achieved an industry milestone witha clock speed of one gigahertz, processing one billion bits of information a second,the computer industry's equivalent of breaking the sound barrier. Share price ofAMD will likely: Answer• increase• decrease• unchanged• can’t determine

4. Because businesses no longer fear Y2K, PC shipments are expected to rise 20%from the first quarter a year ago. Share prices of Dell, Intel, and Compaq willlikely: Answer • increase• decrease• unchanged• can’t determine

5. Al Gore claims he invented the Internet. He is leading the polls and will mostlikely become the first president of the new millennium. Share prices of Yahoo!,AOL, and eBay will likely: Answer• increase• decrease• unchanged• can’t determine

6. Yahoo!’s “Surprise Earnings” news reported that Procter & Gamble, maker ofCrest toothpaste and others, projected that earnings will be 21% below the Wall Streetexperts’ (analysts) estimate due to higher expenses. Share price of P & G will likely:Answer• increase• decrease• unchanged• can’t determine

7. AOL surprisingly announces the mega merger with media giant Time Warner,signifying the growing power of Internet companies. Share prices of Yahoo! andEarthlink will likely: Answer• increase• decrease• unchanged• can’t determine

8. The co-chairman of Citigroup, John Reed, announces his retirement. Thesuccessor, Sandy Weill, will become the sole CEO. Robert Rubin, former Secretaryof Treasury, will likely take over the top job in 2 years when Weill retires. WallStreet experts think Reed’s retirement is a positive to the company. Share price ofCitigroup will likely: Answer• increase• decrease• unchanged• can’t determine

9. President Clinton announced that U.S. and Britain agreed to openly share datafrom a project to map human genes. Shares prices of the biotech stocks will likely:Answer• increase• decrease• unchanged• can’t determine

10. Yahoo! held talks with eBay about various forms of partnership and a possiblemerger. Share price of eBay will likely: Answer• increase• decrease• unchanged• can’t determine

11. Sears and America Online unveiled a wide-ranging strategic alliance thatincludes cross-marketing and promotional agreements. Share price of Sears willlikely: Answer• increase• decrease• unchanged• can’t determine

12. The strike of Boeing’s engineering and technical workers has delayed sometesting and production of the F-22 fighter. Share price of Boeing will likely: Answer• increase• decrease• unchanged• can’t determine

13. Intergraph's antitrust suit against Intel was dismissed. Share price of Intergraphwill likely: Answer• increase• decrease• unchanged• can’t determine

Answers to “How Does News Influence Stock Prices?”1. Share prices will likely decrease. If the Federal Reserve declares an increase in

interest rates, mortgage payments will increase. This increase will cause housing tobe less affordable, therefore hurting share prices of real estate companies.

2. Share prices will likely increase. Companies such as General Electric, IBM, and3M will be more profitable as a result of higher productivity. The companies willbe able to make more while having a lower cost to produce the product.

3. Share prices will likely decrease. The airline companies will have to pay a higherfuel cost. They will not be able to pass along the increased cost to consumers orraise the cost because of the increase in fuel prices.

4. Share price will likely decrease. Because the judge declares a monopoly onMicrosoft, the government will likely put penalties on Microsoft. Also, hundreds ofprivate pending lawsuits are arising against Microsoft.

5. Share price will likely increase. AMD beat industry leader Intel for the fastestmicroprocessor and will also take market shares away from Intel.

6. Share prices will likely increase. Because of increased shipments, companies willhave an increase in sales and, therefore, profits.

7. Share prices will likely increase. If Al Gore becomes the next president, he willlikely have policies favorable to Internet businesses.

8. Share price will likely decrease. Changes in share prices are greatly tied toearnings. In addition to P & G’s reported poor earnings, Wall Street doesn’t likedownside surprise earnings.

9. Not enough information to determine. The announcement of the merger is tooearly to determine whether it will have any impact on Internet companies likeYahoo and Earthlink.

10. Share price will likely be unchanged. All three management are well-respectedindustry leaders. The retirement of any one will not affect the operation of thecompany because all are competent to take over the job without any problems.

11. Share prices will likely decrease. The private sector will be competing with thehuge amount of resources and research as a result of the government-funded labs.

12. Share price will likely increase. eBay will likely be the target that Yahoo willacquire.

13. Share price will likely increase. The alliance will likely cause an increase inSears’ sales because of the exposure on the Internet to the 22 million AOL users.

14. Share price will likely decrease. The strike will likely affect Boeing’s sales anddelivery of products to the government.

15. Share price will likely be unchanged. Intergraph will not be able to getany compensation from Intel.

Stock Market Savvy I n v e s t i n g f o r Yo u r F u t u r e

The New York Stock Exchange, with the assistance of Lifetime

Learning Systems, a division of Weekly Reader, is proud to present

this free educational program, Stock Market Savvy: Investing for

Your Future.

Specifically designed for middle school and high school students,

this program includes eight reproducible activities that can be cus-

tomized to the needs of your class. The goal is to introduce your

students to the financial world of long-term savings and invest-

ment in stocks. Students will see that long-term savings through

investment in the securities market is integral to the economy and

their own personal lives.

This program will introduce students to the high-tech, exciting

nature of the NYSE and the skilled market professionals that use

state-of-the-art technology on the Trading Floor. They will also

understand that the NYSE maintains high standards of conduct

and integrity in the auction market to ensure fair trading in secu-

rities for all investors.

Stock Market Savvy: Investing for Your Future also helps

students discover how to make informed investment decisions and

understand why long-term savings through securities investment is

important as they prepare for their future goals and dreams.

Although the material is copyrighted, it can be reproduced for

teaching purposes. Please complete and return the enclosed Educator

Reply Card to receive future free educational programs and the

enclosed survey to provide feedback on this program.

Information for Educators from the New York Stock Exchange

Program Objectives

Provide students with an understanding of theworld of securities investment and its importanceto their personal lives and private enterprise.

Introduce students to the high-tech, excitingnature of the NYSE and the skilled market professionals on the Trading Floor and in theequities marketplace.

Teach students about the high standards of con-duct and integrity at the NYSE that ensures fairtrading for all investors.

Explore how supply and demand affects stockprices in the securities marketplace.

Encourage teachers, students, and their familiesto explore the opportunities for long-term savings growth as active and informed investors.

Target AudienceThis program is designed for middle school and highschool students in social studies, business, econom-ics, math, consumer skills, or other relevant classes. Itis helpful when teaching financial responsibility orfor use in after-school stock or business clubs.

Program ComponentsThis eight-page teacher’s guide, which containscurricular objectives, background information,instructions for using the student activity mas-ters, answers to the student exercises, and sug-gested extension activities

Eight reproducible student activity masters

Two different full-color wall posters for class-room display

A teacher survey

How to Use the PostersPlease display both posters in your classroom.

Poster #1 (New York Stock Exchange): This posterwill familiarize students with the New York StockExchange and help them appreciate the role NYSE-listed companies play in their daily lives and the econ-omy. Owning stock in a company means owning apiece of that business. Investments grow over time andthis means young investors can create a great oppor-tunity for future earnings.

Poster #2 (How To Read Stock Tables): One wayto get a stock quote during the day is to look at theelectronic tape on the Internet (at websites likewww.nyse.com) or on television. These rollinglists of stock symbols and prices are continuouslyupdated after each trade. For more information,you can also read a stock listing. This poster showshow to read NYSE stock listings in daily newspa-pers or on the Internet. It uses a newspaper stocklisting to explain the various headings. Refer tothis poster when your students begin Activity 3:“Understanding Stock Tables,” which presents thestock listing as it might appear on the Internet.Remind students that the information is the samewhether they’re reading a stock listing in thenewspaper or online.

Up Close and Personal The Stock Market & You

Objective: This activity introduces students to the securities market, helpsthem make a personal connection to the New York Stock Exchange auctionmarket, and understand how public companies affect their daily lives.

Begin by asking students what they know about the stock market. Explain

that Wall Street in lower Manhattan is home to the New York Stock Exchange.

Encourage students to visit www.nyse.com to learn about the history of the

New York Stock Exchange.

Find out how many students or their families own stock. Explain that their

families might participate indirectly in the stock market through retirement

accounts or 401(k) plans at their jobs.

Explain that stock is a share of ownership in a business. Ask students

to provide examples of things that they own. Then, explain that stock owner-

ship provides risks and rewards to investors.

Discuss why it is important to save. Have students consider things they want

to save for now (computer games, clothes, sports equipment, DVDs). Then

have them think about their future goals (college, car, house). Explain how

their need for savings will increase as their goals become more expensive.

Discuss that even at a young age investing in stock can be part of long-term

financial planning that will lead to security and economic independence

later in life.

Distribute the activity sheet and have students work individually or in small

groups to complete it. They should use www.nyse.com, search the Internet, or

check newspapers to find out if any of the companies they wrote down are

NYSE-listed companies.

Point out that some companies are harder to find because they are

subsidiaries of larger corporations, known as parent companies. An Internet

search will help students determine the parent company’s listed name.

After students complete the activity, compile a class list of NYSE-listed com-

panies that manufacture or sell products and services associated with favorite

student activities.

Stock Talk Market Terms

Objective: This activity introduces students to basic stock market terminology, familiarizes them with the special characteristics of the NYSEauction market, and explains why a company issues stock.

Introduce this activity by explaining that the NYSE is an auction

market where buyers and sellers of securities meet and compete for

the best price for their customers. A trade takes place when the best

bid meets the lowest offer to sell. Stock prices are determined by

supply and demand.

1

2

Conduct a mock class auction of different items (e.g., a CD,

movie tickets, a night of no homework, etc.) to see how much

students are willing to pay for them. Explain that the NYSE is a live

auction. If they’ve used Internet auction sites, then they know that a

seller puts an item up for sale and several people compete to buy the

item. The same thing happens with stocks as buyers and sellers com-

pete for the best possible price.

Distribute the activity sheet, have students role-play the characters

in the dialogue, and complete the activity. Review the answers

as a class.

Answers1. Initial Public Offering 16. Dividend

2. Bull Market 17. Capital

3. Bear Market 18. Supply

4. Stockbroker 19. Bond

5. Stock 10. Demand

Generate a class discussion using terms and topics presented in the

activity. Explain that a company that wants to grow has several ways

to raise funds and review the pros and cons of each method:

1. The company owners can use personal funds to expand the

business, but available funds will be limited and the business

expansion will be relatively short-term.

2. The company can borrow from a bank, but it can only

borrow what it can prove it will be able to pay back at its

current level of business. It will have to repay the loan plus

interest almost immediately after it has received the funds.

3. A company may issue bonds. A bond is an I.O.U. or loan from

investors. Investors lend a company money and after a certain

time the bond “matures” and the company then pays each

investor the amount they invested plus interest. This option

carries the burden of repayment with interest.

4. A company can raise funds by selling shares of ownership in

itself, called stock, to the public. When a stock offering is

successful (many people buy the new stock), a company can

obtain large amounts of capital and can use these funds imme-

diately for expansion. Then, if profits increase, the stockhold-

ers will share in the company’s success by receiving dividend

payments. This option places no fixed limit on the amount of

funds a company might raise and no restrictions on the

opportunities for growth.

Discuss reasons why a company might decide to go public (the

process when a company offers shares of stock to the public for

the first time): raise capital, expand operations, fund research and

development, pay off debt, provide employees with benefits, and

develop marketing strategies. Remind students that the purpose of

issuing stock is to raise funds that will help a company grow. This,

in turn, creates more jobs, generates additional revenue,

contributes to the development of better products, and helps to pro-

mote general economic expansion.

Extension ActivityHave students brainstorm ideas for a business that they couldstart and run (e.g., grass-cutting or pet-sitting business). Askstudents to list some of their business expenses (e.g., lawnmower, pet food, flyers to advertise, etc.). Then, discuss how abusiness can raise the capital it needs: the students can investtheir own money, borrow from the bank, issue bonds, or sellstock in the business to outside investors. Then, review what theywill do with the profits (distribute among shareholders or savesome of the profit and reinvest it in the business).

Understanding Stock Tables

Objective: This activity focuses on how to read stock tables in anewspaper or on the Internet.

Ask students to describe what it means to be an informed investor.

Recommend reading financial newspapers, magazines, and

websites for investment information. Explain that stock market

activity is reported through a variety of indexes which measure the

state of the economy. When you hear “the market was up,” people

are referring to an index. One of the best known and most widely

cited indicators is the Dow Jones Industrial Average which tracks

the stock prices of 30 major “blue chip” companies.

Explain to students that being an informed investor also means

understanding how to read stock tables. The traditional way to

check stock tables is in the business section of newspapers. Today,

this information is also available in real-time format on the Internet.

Explain that the Internet has revolutionized how people retrieve

their stock information.

Refer your students to Poster #2: “How To Read Stock Tables”

and review what the various headings mean. The poster shows

how stocks are read in newspapers and online, using a newspaper

stock listing to explain the various headings. On the activity sheet,

students will be presented with a stock table as it might appear

online. If your students are interested in seeing examples of actual

online stock listings, have them log on to www.nyse.com.

Distribute the activity and review the answers as a class. This

activity can be customized to match the skills of your class.

Create additional math questions to challenge the class.

Answers 1. $10,528.00 4. $168.00

2. $104.95 5. $5,488.00

3. 3,976,700

Extension ActivityHave students look up an NYSE-listed company that interests themon www.nyse.com and answer the same questions that they did inActivity 3: “Understanding Stock Tables.”

3

4Ready, Set, Auction

Objective: This activity is designed to familiarize students with theskilled market professionals who work on the Trading Floor and theadvanced technology that delivers fast, efficient, and cost-effectivetrade executions. The NYSE is governed by a precise set of rules andregulations and also uses technology to maintain continuous mar-ket surveillance to ensure fair and efficient trading.

Introduce this activity by explaining what it means to have a seat

on the Exchange. There are 1,366 seats and they are not physical

seats, but membership that can be bought or leased. A seat is a

property right that gives you the right to trade. Remind students

that NYSE-listed companies don’t own seats. Although individuals

can buy seats, they are primarily owned by brokerage houses and

investment firms. So if XYZ Brokerage House buys 20 seats, they

have 20 members.

Explain to students that securities are traded by highly skilled mar-

ket professionals who have qualified for membership in the NYSE.

There are different types of membership in the NYSE and each one

serves a different purpose on the Trading Floor:

1. Floor brokers constitute the largest single membership group

of the NYSE. They receive their orders electronically on the

Trading Floor either at their trading booth location or on

mobile, wireless handheld computers.

2. Specialists serve as the contact point between brokers with

buy and sell orders in the NYSE’s agency-auction market.

Each NYSE-listed stock is allocated to a specialist, who

trades only specific stocks at a designated location called a

trading post. The number of stocks traded by an individual

specialist varies according to the total activity of the stocks.

These professionals are responsible for overseeing the

orderly trading of specific stocks to maintain the market’s

fairness, competitiveness, and efficiency.

Ask students how technology has changed their lives. Explain that

the NYSE has evolved into the most technologically advanced

equities market in the world. It uses technology to support and

enhance human judgment, trading over 1.4 billion shares daily.

Explain that over the last 211 years, the NYSE has used technology

to improve service, increase trading, and maintain a fair trading

environment. For example, in the decade following the Civil War,

the stock ticker (invented by Thomas Edison) and telephones

increased trading and opened Wall Street to investors across the

country. In 1975, the consolidated tape was introduced as a world-

wide reporting system of price and volume data for trades in all

markets in which the securities trade. Today, through a sophisticat-

ed electronic network called SuperDOT®, 95% of orders make their

way to the specialists’ workstations on the Trading Floor. About 5%

of orders are walked out by brokers to the specialists (these are large,

institutional orders). As the NYSE evolves toward a paperless

Trading Floor, floor brokers are using wireless, handheld devices

called e-BrokersSM to receive orders, improve the flow of infor-

mation between customers and the point of sale, and manage

their inventory.

Explain that the high-definition post display units, the computer

monitors above the trading posts, contain a variety of information

about the stocks that are sold there (stock symbol, last sale, net

change, bid and offer, and volume).

Distribute the activity sheet and encourage students to visit

www.nyse.com to learn more about the technology and to

experience an exciting 3-D view of the NYSE Trading Floor.

Review the answers as a class.

Answers1. B 5. A

2. F 6. D

3. E 7. H

4. C 8. G

Anatomy of a Trade

Objective: This activity focuses on how a stock is traded at theNYSE as students place the steps in chronological order.

Explain to students that when they check the price of a stock, they’re

checking a quote. Like an auction, there are two prices: a bid and an

asked. If you want to buy a certain stock for $30, that’s your bid. The

person who owns the stock wants to sell it for the highest price pos-

sible, say $30.02. This is the offer or asked. The difference between

the bid and asked price is called the spread.

Explain that investors must indicate the type of order they want to

place when buying or selling stock. Some common types of orders

include: A market order, which tells the broker to buy or sell at the

best price currently available, and a limit order, which tells the bro-

ker to buy or sell at a specific price or better. The broker will try and

get the best possible price for the customer, but can’t sell below or

buy above the specified figure.

Reemphasize the roles of the market professionals and their

interaction with the NYSE technology. While a stockbroker (often

another term for financial consultant) can make investment

recommendations, and the NYSE technology speeds and

safeguards the transactions, the investor must take the ultimate

responsibility for understanding his or her investments.

Distribute the activity sheet for the class to complete and then have

students take turns going through the correct order.

Answers3, 1, 4, 6, 5, 8, 7, 2

Extension ActivityInvite a member of a local brokerage firm to talk to the classabout his or her job and finance as a career. Have students pre-pare questions in advance of the visit.

5

Market Cycles What Drives StockPrices

Objective: This activity explores how supply and demanddrive stock market prices in the NYSE auction market. Studentsalso discover how outside events and news can affect theNYSE’s auction market.

Introduce this lesson by asking students what influences stock

prices. Explain that different events can move a company’s price

up or down. Industry factors that drive stock prices include

earnings or sales growth, new product releases, leadership

changes, or legislation. Outside forces and world events like new

competition, economic news such as interest rates and inflation,

government policy changes, natural disasters, or weather can

also affect stock prices.

Remind students that the laws of supply and demand determine

stock prices in the securities markets. Provide examples that

they can relate to (old baseball cards, popular sneakers or fash-

ion trends, electronic toys, gasoline). To familiarize students

with the concept, you can also talk about the effect of rumors or

speculation. Relate rumors to supply and demand and discuss

how they can affect market cycles.

Then explain that the supply of stocks is based on the number of

shares a company has issued. The demand is created by people

wanting to buy those shares from investors who already own them.

If people think they will make more money on a stock, they will

want to buy it. But supply is limited, and not everyone who wants to

own a company’s stock can. The more that people desire to own a

stock, the more they will be willing to pay for it.

Help students understand that an awareness of current events can

help them become educated investors. While investors and ana-

lysts decide whether a stock is worth buying by examining the

financial health and profit history of a company, they also look at

how news events can influence stock prices by their effect on sup-

ply and demand.

Distribute the activity sheet and have students work in small groups

to analyze the impact of the news events. Review their answers as a

class, drawing upon the suggested answers that follow.

Answers

1. With the orange crop supply reduced by the lack of rain, the

bottlers’ costs will rise as companies pay a premium for the

oranges they need. The companies will probably have to raise

prices for their products to offset increased expenses, but will

need to be careful that they don’t price orange juice so high

that they lose customers. Ask the students to discuss how

weather and natural disasters can affect the price of the foods

we eat, and in turn, the companies that provide that food.

2. Stock prices in battery companies will rise as battery-pow-

ered vehicles become more popular as a way of saving on

gas and reducing pollution. Have the students discuss what

gas companies might do to compete with growing interest

in battery-powered cars (Reduce pollutants in gasoline?

Cut gas prices?).

3. A big movie can generate a large, profitable merchandising

tie-in chain reaction among toy, clothing, food, and many

other manufacturers. And a flop can result in a similar chain

reaction of losses for all those companies. Have the students

discuss the kinds of tie-ins that occur, and their short- and

long-term economic effects.

4. Competition is a fact of life for any company. Unless Digital

Dream can find a way to cut costs, it’s likely that it will lose

customers to its competition, and will face dwindling profits.

The competition will be enjoying the profits of successful

new products. Discuss with the students the need for com-

panies to invest some of their profits in research and devel-

opment to find new products and improve existing ones.

Extension ActivityHave students review national and international news headlines or news broadcasts to determine which types of indus-tries they might monitor for investment. Also, encourage stu-dents to check interest rates and determine how they will affectstock prices.

Market Regulation Protection for AllInvestors

Objective: This activity focuses on the integrity and self-regulationof the NYSE, its zero tolerance for inappropriate conduct, and howthis works to ensure fair trading for all investors. The NYSE placesthe highest importance on fairness and on earning and keeping thetrust of its investors.

Distribute the activity sheet and have students review the pyramid

of regulatory agencies. The market protects and maintains itself

through the combined efforts of four groups that comprise the reg-

ulatory pyramid:

1. The U.S. Congress forms the peak of the regulatory pyramid.

Congress created the SEC and other organizations to protect

and enforce fair trade on U.S. securities markets.

6

7

2. On the next level is the Securities and Exchange Commission

(SEC), the federal watchdog agency that regulates and strictly

enforces conduct of every organization participating in U.S.

securities markets.

3. On the next level is the NYSE and other self-regulatory

organizations. The NYSE is the most active self-regulator

in the securities industry. Its extensive rules, policies,

standards of conduct, and comprehensive high-tech surveil-

lance of its member organizations and the investment com-

munity ensure operation at the highest levels of fairness and

integrity. Over a third of NYSE employees work in regulation.

4. The broad base of the pyramid consists of individual

brokerage firms that are members of the securities markets.

Self-regulation, the way the securities industry monitors

itself to create a fair and orderly trading environment, begins

with the strict rules of conduct enforced by these firms.

Explain that this network of regulation is designed to detect,

investigate, and punish all forms of improper conduct to ensure fair

trading to all investors.

Explain that NYSE StockWatch is a state-of-the-art computer

surveillance unit that continuously monitors the stock market

for unusual trading patterns.

Distribute the activity and have students base their answers on the

questions provided, specifying the appropriate agencies involved.

AnswersCase Number 1: The NYSE’s self-regulatory system would have

detected the firm’s fraudulent activity and taken appropriate

action against it.

Case Number 2: Both the SEC and the NYSE’s self-regulatory

system would investigate this type of fraud. The NYSE’s market

surveillance system would detect the friends’ attempt at an

insider purchase of Super Soda, discovering that they graduated

from the same college, live near each other, that Karen bought a

lot of shares before the stock price jumped, and Janice worked

for the firm that provided advice on the merger. The SEC would

get involved because they can also prosecute insider trading.

These agencies would monitor the suspicious transaction and

prosecute the friends.

Case Number 3: The brokerage house would have disciplined

the broker for violating rules of conduct of the firm and the NYSE

would have taken disciplinary action as well.

Getting Started Investing

Objective: This activity challenges students to carry out a process-oriented assignment, researching companies, and making investment decisions as they begin to build a port-folio. Students can work individually or in teams to researchcompanies for investment.

Distribute the activity and explain the concept of a portfolio

(a person’s investments). If you’re a professional photographer, you

have a portfolio of your work. If you’re an investor, you have a group

of investments, which include stocks, bonds, and other securities.

Stress the importance of being an informed investor and remind

students that the majority of people invest in stocks to build long-

term savings.

Explain to students that they’re going to research three companies

from different sectors. Encourage them to consider investments in

companies that interest them. They should consider the financial

health of companies whose stock they want to purchase and pay

attention to news events. They can use www.nyse.com, the Internet,

the library, newspapers, magazines, and annual reports to obtain

their information.

Students should fill in the activity sheet and then write a report

based on their research. Write the following questions on the board

that students should consider when researching: How is the indus-

try sector doing? What is the history of the company and how has it

changed? (e.g., What did the company originally manufacture/sell

or what service did it originally provide? Does it still provide those

products or services? What other products and services does it pro-

vide today?) When did the company start and when did it go pub-

lic? Who is the President or CEO? Where is it based? How many

employees does it have? Does it have an international division?

What was its profit and debt last year? Did the company issue any

dividends in the last five years? What was the company’s price

change over the last year?

As students complete this activity, they will begin to recognize how

their education and personal interests influence the informed deci-

sions they make about purchasing stock.

Extension ActivityTwo weeks after students complete this assignment have themcompare how their stocks have done. Ask them: Would youmake any different decisions on stocks you bought? Did any out-side event affect your stock? Could you have foreseen it? Whatwould you add to your portfolio?

© 2001 New York Stock Exchange, Inc.

8

What is the Stock Market Pretest?Name ______________

1. What is a stock?

2. How do you buy and sell stocks?

3. What are the benefits of buying stocks?

4. What are the disadvantages of buying stocks?

5. How do you know what stocks to pick?

6.What math does a stockbroker need to know to work in thestockmarket?

www.nyse.com© 2001 New York Stock Exchange, Inc.

2Stock Talk

MARKET TERMS Activity

JAMIE: (teenager) Did you hear that the new model of the cell phone I got last year has a built-inMP3 player?

DAD: It sure sounds like Talk2Me knows teens.

JAMIE: Don’t you own stock in Talk2Me? You shouldcall your stockbroker to buy more. They makeso many cool products!

MOM: We bought stock when the company had itsinitial public offering a few years ago.

JAMIE: What does that mean?

MOM: Talk2Me went public so they could raise money,or capital, to expand and create new productslike the MP3 phone.

DAD: At the time, we only owned bonds, which areloans that investors make to corporations andgovernments. The lenders earn interest, and theborrowers get the money they need.

MOM: We thought the value of communicationsindustry stocks would grow over the long term.The stock market moves in cycles from a periodwhen stock prices are generally rising, known asa bull market, to times when stock prices on thewhole are falling, called a bear market.

JAMIE: What makes stock prices rise or fall?

DAD: Stock prices go up or down depending onsupply and demand.

JAMIE: What else influenced your choice in buying this stock?

MOM: From our research, we also learned thatTalk2Me pays its shareholders dividends, ormoney from it’s profits. You’re catching on...

JAMIE: So does that mean I get a new MP3 phone?

1. A/An ______________ is the first time a companysells shares of itself to the public to raise capital.

2. A/An ______________ is when the prices ofstocks are generally rising.

3. A/An ______________ is when the prices ofstocks are generally declining.

4. A professional who is licensed to buy and sellstock is a/an ______________.

5. When you own ______________ in a company,you are a shareholder.

6. From its profits, the Board of Directors of acompany can declare a/an ______________ to bedistributed among the shareholders.

7. Money, also called ______________, is needed toexpand a company.

18. ______________ is the quantity or amount of aproduct that is available.

19. A/An ______________ is a loan, or an I.O.U., thatinvestors make to corporations and governmentswhich pays interest over a fixed period of time.

10. How much of a product or service that is in______________ can affect the stock price.

KEY TERMS

Stock

Bond

Bear Market

Bull Market

Capital

Supply

Demand

Stockbroker

Dividend

Initial Public Offering

EVERY BUSINESS has its own language. To understand the stock market, let’s listen in on one family’s breakfast conversation. Soon you’ll be “talking the talk”!

DIRECTIONS: After reading the dialogue, fill in the blanks using the key terms provided to test your knowledge of some common stock market terms.

Key Vocabulary__________________—A declining market

____________—The price offered by a willing buyer

___________—A rising market

___________—A firm or individual who arranges a transfer ofsecurities between a buyer and a seller, charging a fee for theservice.

_____________________________—Profit or loss from the saleof a capital asset.

________________—Payment a company makes, in cash or stock,to its shareholders.

_________________—A period during which the purchasingpower of the dollar is declining.

_______________—Payment to a creditor by a borrower for theuse of money.

_________________—The price at which transactions in asecurity take place.

__________________—Typically consist of a group of stocks,bonds, or money-market securities from more than one source. There are three types—income funds )for people who need moneyto live on); growth funds (pay low dividends or one—works bestfor investors who can leave money in the fund so it can grow overa long period of time; and balanced funds (combination of stocksand bonds).

____________________________—The largest auction marketsecurities in the nation.

_________________—All of the securities held by an individual,investment club or institution.

_____________—Same as earnings or income.

_________________—Synonymous with sales and receipts

____________________—Synonymous with stockholder orshareowner, the owner of one or more shares of a corporation.

______________—Businesses need money to grow. To get thismoney, some businesses sell shares, units of ownership of theircompany.

_____________________—The issuance of a number of sharesfor each share of stock outstanding. The common purpose of asplit is to broaden ownership and increase marketability.

Vocabulary from Starting and running a Profitable InvestmentClub by Thomas E. O”Hara and Kenneth S. Janke, RandomHouse, 1998.

Campus Life, March/April 2001

Whose Money Is It, Anyway?How you handle your cash says a lot about what you value the most.

by Larry Burkett

We've all heard the basics about how to handle money: give some to church, savesome, spend wisely, avoid debt, follow a budget, and so on.

It's all part of "stewardship," a fancy word that means so much more than whetheror not we put a certain amount into the offering plate on Sunday mornings.

What does "stewardship" really mean? Larry Burkett, who's long taughtChristians how to better handle their money, has been answering that question foryears. Stewardship is more about our attitude than anything else.

Here's how Larry explains it in one of his books:

Most of us have an upside-down view of money. We figure themoney we have is ours; God's money is just the portion we putin the collection basket.

But God has a different view. As Lord and King, he ownseverything—including the money we call our own. He has clearideas of what he wants us to do with his money. We need tomanage money according to God's plan.

I've come up with five steps to help you do this:

Step 1: Give It All to GodGod has placed the toughest step of all right at the front. Onceyou accomplish this step—admitting that he owns everything—allthe others will fall into place. Here's why.

God expects us, as Christians, to transfer ownership of everypossession to him—money, time, parents, brothers, sisters,girlfriends, boyfriends, education, and things like cars, clothes,and other possessions.

Did I leave anything out? If I did, add it to your list. God expectsit all. In fact, if you believe you own anything, that will affect yourattitude.

It's important that you gain the proper understanding ofstewardship. By Webster's definition, a steward is "one whomanages another's property." We are merely stewards of God'sproperty while we're here on Earth. God will not force his will onus. If we transfer everything to God, he will keep his promise tomeet every need we have through physical, material and spiritualmeans.

There is absolutely no substitute for this first step.

Step 2: Don't OverspendFirst, you need to have a written plan of all the stuff you're thinkingabout buying, in order of importance. Determine whether eachthing is a need, a want or a desire.

Needs are obvious—things like food and clothing. Wants can alsoappear awfully important. You may need a new pair of jeans, butdoes it have to be the most expensive kind? That's the differencein a need and a want.

Desires are tougher to define. They don't exactly seem likeneeds, but they could—if you rationalize them. Maybe the oldclunker you're driving works fine, but if you got a new car, youwouldn't have to worry about it breaking down.

There's nothing wrong with desiring nice stuff. But if itrearranges your priorities, takes your attention from what'simportant, and gets you into debt, you're in trouble.

Second, open a savings account and put something into it everyweek or every month, regardless of how much. The amount isn'tnearly as important as the act of doing it.

Step 3: Tithe RegularlyEvery Christian should tithe as a minimum testimony to God'sownership. God wants you to give back to him the first part ofwhat he has given you: "Honor the Lord with your wealth, withthe firstfruits of all your crops" (Proverbs 3:9).

The amount of your tithe is between you and God. What'simportant is that, just like with your savings account, you'reregularly giving to your church, a charity and/or someone inneed.

Step 4: Don't Overdo ItMost of us rarely pass up a want or a desire, much less a need.We need to learn to control those wants and desires by refusingto give in to them—and to give them to God instead. We must,as the Bible says, "deny ourselves" and follow Christ (Luke 9:23).

Step 5: Avoid Snap DecisionsYou're always going to be tempted to buy stuff and make quickfinancial decisions—through advertising, through peer pressure,through your own wants. Resist the urge to splurge. The Biblesays "the plans of the diligent lead to profit, as surely as hasteleads to poverty" (Proverbs 21:5).

Want to dig into more practical advice for handling money? Then check outLarry's Money Matters for Teens workbooks, for ages 11-14 and15-18. You can find the workbooks ($10.95 each) at Larry's Website: www.cfcministry.org.

Copyright © 2001 by the author or Christianity Today International/Campus Lifemagazine.Click here for reprint information on Campus Life.March/April 2001, Vol. 59, No. 8, Page 46

Copyright © 1999 - 2000 PBS 45 & 49

Stock Market Tutorial

Name _________________________ Date __________________

Go to Edustock on the Internet http://library.thinkquest.org/3088/

Select "The Stock Market" from the menu and answer the questions.

The Beginning:

1. What was traded at Trinity Church in Manhattan 200 years ago? Why?

2. How did "bonds" come into existence?

3. In what year was the New York Stock Exchange (NYSE) started?

4. What was the purpose of the NYSE?

5. What is AMEX and how did it get started?

How It Works:

1. What is a "share" of stock?

2. What is a brokerage house?

3. What is the procedure when you choose to buy a stock?

Mutual Funds:

1. What is a mutual fund?

Rules:

1. What is the Securities Exchange Commission (SEC)?

Crashes:

1. What is a stock "crash?"

Market Trends:

1. List five reasons why the stock market goes up and down?

1.

2.

3.

4.

5.

What is a Stock?:

1. What is a stock?

Copyright © 1999 - 2000 PBS 45 & 49

2. What is a proxy ballot?

4. What are the three types of stock and how do you distinguish them?

1.

2.

3.

Types of Stocks:

1. What is a common stock and why is what the company does important to this type ofstock?

Buying and Selling

1. What is the difference between publicly and privately held corporations?

52-Week Yld SalesHigh Low Stock Div % P/E 100s High Low Last Chg

63.88 35.31 XYZ Comm 1.76 3.9 15 15584 45.73 44.58 42.20 -0.07

52-week high and low:The highest and lowestprices paid for the stockduring the past year.

Last: The last price paid forthe stock at the end ofthe previous day.

Div: Short for dividend. A dividendis when a public companydecides to pay a portion of its profits to stockholders. Foreach share of stock owned, ashareholder should receive$1.76 from the company’sannual profits.

Yld%: The yield, or rate of return,on a stockholder’s investment.It is figured by dividing theannual dividend by the currentprice of the stock.

P/E: Short for price/earningsratio. The price of a shareof stock divided by thecompany’s earnings pershare for the last year.

Sales 100s: The total amount of stocktraded during the previousday. This example showsthat 1,558,400 shares ofthis stock changed hands.

Low:The lowest price paidfor the stock duringthe previous day.

High: The highest price paidfor the stock duringthe previous day.

Change: The difference betweenthe last trade and theprevious day’s price.

Grateful acknowledgment to The New York Times, an NYSE-listed company, for allowing us to use their Business Section to show how NYSE stocks are listed.

© 2001 New York Stock Exchange, Inc. Created by Lifetime Learning Systems, Inc.

HOW TO READ

STOCKTABLES

Stock: The name of the company. Everystock traded on a securities market also has a symbol. Somenewspapers list an abbreviationof the company’s name insteadof the symbol. Many financialwebsites let you type in the stocksymbol or the company’s nameto find out its symbol.

In 2001, the NYSE became the first U.S.market to become fully decimalized,trading in dollars and cents instead of fractions.

Today, many people also read stocktables in real-time format on the Internet.


3Understanding

STOCK TABLES Activity

STOCK TABLES keep investors up-to-date on what’s happening in the market. Stocktables, both the electronic versions on the Internet and long columns of small printfound in newspapers, provide information about the stock of publicly traded companies.Here’s an example of a stock table for XYZ Communications that might be found online.

DIRECTIONS: After reading the stock table, answer the following questions:

1. How much would you pay if you had bought 100 sharesof XYZ at the last sale? _____________________________________________

2. What was yesterday’s closing price for XYZ?_____________________________________________

3. How many shares of XYZ were traded since the marketopened this morning?

_____________________________________________

4. What would the total dividend be on 300 shares of XYZ? _____________________________________________

5. If you bought 100 shares of XYZ at the lowest price ofthe year and sold it at the highest price of the year, howmuch money would you make (excluding any taxes orcommission fees)?

_____________________________________________

SYMBOL: XYZ

XYZ COMMUNICATIONS

LAST TRADE CHANGE

105.28 +0.33

105.00 105.80 103.35 3,976,700

OPEN HIGH LOW VOLUME

SHARES OUTSTANDING PREVIOUS DAY'S CLOSE

TODAY'S

PRICE/EARNINGS RATIO: 21.77

INDICATED ANNUAL DIVIDEND: 0.56

YIELD (%): 0.53

52-WEEK

1,737,418,000 104.95 134.94 80.06

HIGH LOW

Yahoo! Finance Activity

Name _____________________________ Date __________________

Use finance.yahoo.com to find the answers.

Symbol Look UpType in the name of the company. Write their stock market symbols on the line followingthe company name.

Coca-Cola ___________ Home Depot _______________

Hershey ____________ Walt Disney Co. _______________Nike ____________ Apple Computers _______________

Quotes & InfoType in the symbol SLR. Answer the questions below from the information given on theQuotes and Info page.

What is the current “Last Trade”? ________________What does that mean? ________________________________________________

What was yesterday’s close? ___________________________________________Has the price gone up or down today? _______________

By how much? ____________

What is the most this stock has sold for in the past year? ______________What is the least it has sold for? _______________

More on SLR (sidebar links)

Historical Prices:

What was the closing price on July 14? ____________What was the opening price on March 10? _________

Based on what you have seen, what do you predict the price will be in 1 month? _______

Headlines:

What are three things that have happened to Solectron in the past month?1. ___________________________________________________________

2. ___________________________________________________________3. ___________________________________________________________

Company Profile:How many employees does Solectron have? _________

What does Solectron do? (business summary) _________________________________________________________________

__________________________________________________________________

Click on “ratio comparisons.” What is Solectron’s BETA? _______Is this a risky investment? __________

Competitors:List three competitors of Solectron.

1. ____________________________ 2. ____________________________

3. ____________________________

Finances: Income Statement

What was Solectron’s Net Income as of August 31, 2003? _________________

Research a Company

Write a one-page biography of a company that Mr. Ezell will assign you. You will giveyour report orally to the class next week Friday (Date). You will hand in a hard copy ofthe report to Mr. Ezell.

You will need to include the following information in your report:

What do they do? Mission Statement Competitors History of the company Summary of their income statement/balance sheet from the past year Would you recommend buying this stock? Why or why not?

STOCK OWNERSHIP: A DELICIOUS TOPIC

Name________________________ Date ________________________

Toad is Maria's best friend, but sometimes his impractical schemes are a bit much,even for Maria. Yesterday was a good example. He embarrassed her at McDonald's justbecause he was ignorant about stock ownership and insects.

Stock ownership and insects? Yes. It all started when Toad stopped by Maria's houseand asked her to go to lunch at McDonald's. "Nothing like fries and a burger andsomething special for lunch," he said, as they walked over ot the local Golden Arches.

"Something special?" she asked. But he just ignored her as he hopped along, carryinga carefully folded brown bag.

At the restaurant, Toad offered to buy lunch. He asked maria to find a table and toguard his brown bag. "Don't look inside, it's a surprise," he said. That should have beenenough warning, Toad buying lunch and asking her to guard a brown bag; but she justwent along with everything because he brain was temporarily locked in the numbposition.

Shortly he joined her at the table with the food and a sour mood. "What is thematter?" she asked. "Didn't they give you good service?"

"Oh, yes," Toad grumped, "but apart from the service she was so uncooperative! Isaid I wanted to see the owner about this great idea of mine, but she said she was thelocal franchise owner. I said, 'so you own all the McDonald's in the world?' And shesaid, "No, it is impossible to talk to those owners.' Then she started waiting on the nextcustomers. She's so rude!" Toad moaned.

"Actually," Maria replied, "she is right. There are 226,656 owners of McDonald's. Maybe you should become an owner."

"That's a great idea," Toad replied. "Then I could have the restaurants serve myfavorite foods and I could eat free. If I own the business, then I get to run it my way,right?"

"Not exactly," Maria replied. "I learned a lot about ownership and business by surfingthe Internet. If you want to become a part owner of McDonald's, all you have to do isbuy stock in that company. You become a part owner of the company, but many otherpeople will also have bought stock in the company. So you are only one of many peoplewho share its ownership. That's why stocks are called shared."

"But I could only eat a tiny share of all the food McDonald's cooks each day," saidToad. "As a part owner, couldn't I eat part of their food?"

"No, you couldn't. McDonald's has close to 694 million shares of stock. That meansthat the ownership of every hamburger McDonald's produces is really divided into 694million parts. If you buy one share of stock then you would own one of 694 million partsof each hamburger."

"That's hard to imagine," said Toad. "That little bit wouldn't fill me up."

"And the same would be true for the company's buildings, stoves, and furniture. Youwould own only one 1/694 millionth of each thing."

"Well, maybe I could decide what food to put on the menu if I were an owner ofMcDonald's stock," Toad said. "They are really missing a sure bet by not offering a morevaried menu."

"Actually, you can't do that either," Maria replied. "For each share of stock, you getone vote for the company's top managers, or directors. With so many owners orstockholders, you by yourself would not have a big influence on what the company offersas its menu. Actually, managers run the company for you and the other stockholders."

"So what would I get for buying a share of stock in the company?" asked Toad. "Itdoesn't sound like much of a deal to me."

"Each share of ownership entitles you to some of the profits the company earns," sheexplained. "But profit is not a sure thing. If people don't like the food, the companywouldn't earn enough money to cover the costs and earn a profit. Any business is riskybecause the future is uncertain. A company could spend lots of money for buildings,equipment, or developing a new product. But if customers don't like the product or ifprices are too high or products of other restaurants are more attractive, business incomewill be too low. Success is never a sure thing, so there is always a chance of loosing yourmoney. Any business is risky and someone has to bear that risk. That's whatstockholders do as owners of a business."

"Sounds exciting," said Toad. "So why buy a stock and risk losing money?"

"Because you can make a gain also. You think the business will earn a profit on theproduct, so you take the risk. The possibility of earning a profit gives the owners andmanagers of a business an incentive to produce something consumers want to buy at aprice they are willing to pay. If the business succeeds, its owners will earn a profit. Thatis the reward stockholders get for risking their money. Customers also benefit becausethey get something they like. Employees of the business benefit because they have aplace to work and earn income. It's like they're all on one big team with the same goal. But owners are the only ones who risk their own money on whether the goal isaccomplished."

"So by buying a stock," Toad said, "I become a business owner who takes part of therisk that the company might fail. But if the company succeeds, I may get some of the

company's profit. I'd like to do this, because I know McDonald's could make a profitfrom my new menu idea. It's tasty, inexpensive to produce, and everyone in my familylikes it."

Then Maria asked the fatal question. "Toad," she said what is the food you thinkMcDonald's should have on its menu?"

"Look at this great stuff!" Toad shouted as he opened the bag and dumped thecontents onto their food plates." Over at Windy Willows Community Center where allmy relatives live, this is our favorite food. Try some. It's got chocolate on it. I knowyou will like it."

The food was very small--bite sized--and very tasty. The chocolate taste dominated,but Maria noticed an unusual aftertaste that was not unpleasant. Other people sittingnearby were interested, so Toad also shared it with them. Even the franchise owner cameover to see what the fuss was about and tried some. Everything was going great untilsomeone asked, "What is this food?"

On the way home Maria was mad enough to spit. "How could you embarrass me thatway? You know most people do not like to eat ants, flies, mosquitoes, and earthwormparts. Now we can never go back to that McDonald's Restaurant! I know for sureMcDonald's will never hire you to decide on their food menu. Can you imagine whatwould happen to their sales if they served your food?"

"I'm sorry," Toad replied. "I just thought that the chocolate flavor would take care ofthe problem."

Questions for Discussion1. How many people own McDonald's?2. Why would people wish to buy McDonald's stock?

3. How do you become an owner of McDonald's?4. What are the benefits of stock ownership?

5. What are the risks of stock ownership?

6. Will McDonald's accept Toad's suggested menu?7. How do profits help McDonald's?

Worksheet for Graphing

1) The dollar amount should be on the “Y” axis. The high will be on the top part ofthe graph. To determine the perimeters of your graph, find the 52-week range ofthe stock you are graphing. Put the lowest $ it sold for where the X and Y axismeet. Put the highest $ it sold for as the top of the graph.

2) On the “X” part of the graph, will be the weekly dates. Enter these each week asyou follow your stock.

3) On the today’s date, put a filled-in, closed circle where the stock price closed.

4) For the subsequent weeks, put in the appropriate data points.

5) Connect the dots to see the line graph.

012345678

10-Sep 17-Sep 24-Sep Oct. 1

SLR

6Market Cycles

WHAT DRIVES STOCK PRICES Activity

I’VE GOT IT – YOU WANT IT. That’s the basis of supply and demand. But how much I have of anyone item and how much you need of that item will affect the price. News events can trigger a change instock prices when they affect the laws of supply and demand. That’s why news reports flash instantly tothe Trading Floor of the NYSE. Sometimes companies can’t control the supply they have to offer.Sometimes, it’s the demand side.

DIRECTIONS: Read these fictional news headlines, and decide whether you think the stock prices will go up, down, or stay the same.Mark your decision in the appropriate box and describe how and why stock prices will be affected, identifying thecompanies, products, and services impacted.

The Daily Exchange.comhttp://www.thedailyexchange.com

1. Florida in 4-Month DroughtWhat happens to the stock prices of companies that bottle orange juice?m Increase m Decrease m No Effect

2. Battery-Powered Vehicles Are Car of Choice: Consumers Save on Gas, Cut Down PollutionWhat happens to stock in battery companies?m Increase m Decrease m No Effect

3. Hollywood Big Budget, Mega-Movie FlopsWhat happens to the stock in the company that owns the rights to sell merchandise tied to the film?m Increase m Decrease m No Effect

4. True Tech’s Products Compete With Digital Dream’s at 25% Less CostWhat happens to the stock in each company? True Tech: m Increase m Decrease m No EffectDigital Dream: m Increase m Decrease m No Effect

IN THE NEWSLook at newspaper or magazine headlines or follow television newsbroadcasts. List three news stories and indicate whether they mayincrease, decrease, or have no effect on stock prices. Describe whichcompanies, products, services, and industries you think will be affected.

NEWS

•HOME

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•LIFESTYLES

•NATIONAL

• NEWS

•POLITICS

•SCIENCE

•SPORTS

•TECHNOLOGY

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San Jose Christian SchoolStock Market Simulation

Final Assessment

Name:_________________________

Key Vocabulary (Matching)

1) _________Stock

2) _________Dividend

3) _________Bull Market

4) _________Portfolio

5) _________Inflation

6) _________Shareholder

7) _________Stakeholder

8) _________Profit

9) _________Bear Market

10) _________New York Stock Exch.

a. The owner of shares of acompany

b. Units of ownership in a company

c. The largest auction marketsecurities in the nation

d. Earning or Income

e. A person that is affected by thebusiness

f. A period which the purchasingpower of the dollar is declining

g. A rising market

h. A decling market

i. Payment a company makes, incash or stocks, to its shareholder

j. All the securities held by anindividual or investment group

Reading Stock Tables (Answer the Following Questions)

On your computer, log onto finance.yahoo.com. Find the stock with the symbol: YHOOThe stock on your screen should be Yahoo!.

1) How much would you pay if you had bought 100 shares of Yahoo! at the last

day’s sales? _______________________________________________________

2) What was yesterday’s closing price for Yahoo!? __________________________

3) How many shares of Yahoo! were traded since the market opened this morning?

_____________________________________________________________________

4) If you bought 100 shares of Yahoo! at the lowest price of the year and sold it at

the highest price of the year, how much money would you make? (excluding any

commission fees)? _________________________________________________

_____________________________________________________________________

Christian Perspective (Fill in the Blank)

In three or more sentences, what does in mean to be good stewards of the money God

gave us?____________________________________________________________

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

According to Larry Burkett, what are the five steps to be good stewards of the moneyGod gave us?

1) __________________________________________________________________

2) __________________________________________________________________

3) __________________________________________________________________

4) __________________________________________________________________

5) __________________________________________________________________

Key VocabularyBear Market—A declining market

Bid—The price offered by a willing buyer

Bull—A rising market

Broker—A firm or individual who arranges a transfer of securitiesbetween a buyer and a seller, charging a fee for the service.

Capital Gain or capital loss—Profit or loss from the sale of acapital asset.

Dividend—Payment a company makes, in cash or stock, to itsshareholders.

Inflation—A period during which the purchasing power of thedollar is declining.

Interest—Payment to a creditor by a borrower for the use ofmoney.

Market price—The price at which transactions in a security takeplace.

Mutual Funds—Typically consist of a group of stocks, bonds, ormoney-market securities from more than one source. There arethree types—income funds )for people who need money to liveon); growth funds (pay low dividends or one—works best forinvestors who can leave money in the fund so it can grow over along period of time; and balanced funds (combination of stocksand bonds).

New York Stock Exchange—The largest auction marketsecurities in the nation.

Portfolio—All of the securities held by an individual, investment

club or institution.

Profit—Same as earnings or income.

Revenues—Synonymous with sales and receipts

Shareholder—Synonymous with stockholder or shareowner, theowner of one or more shares of a corporation.

Stock—Businesses need money to grow. To get this money, somebusinesses sell shares, units of ownership of their company.

Stock split—The issuance of a number of shares for each share ofstock outstanding. The common purpose of a split is to broadenownership and increase marketability.

Vocabulary from Starting and running a Profitable InvestmentClub by Thomas E. O”Hara and Kenneth S. Janke, RandomHouse, 1998.

Stock Market Research Report List of Companies

1) Microsoft Corporation

2) Adobe Systems, Inc.

3) Steelcase, Incorporation4) Apple Computers, Inc.

5) IBM

6) Pepsi Cola7) Coca Cola

8) Shell Oil9) Boeing Co.

10) Hewlett-Packard

11) Dell Computers12) Ford Motor Company

13) General Motors14) Brocade Communications Systems

15) Agile Software

16) Intel Corporation17) Cisco Systems

18) Macromedia, Inc19) Nortel Networks20) Agilent Technologies Inc

Stock Market Company Oral Report

Name _________________________________ Date ____________________

Company Researched ________________________________________________

Superior = 5 pts Excellent = 4 pts Good = 3 pts Poor= 1 pt

25 – 30 pts = A

20 –24 pts = B14 – 19 pts = C

8 – 13 pts = D

1 – 7 pts = F

Grade ___________

Superior Excellent Good Poor

What they do

MissionStatement

Competitors

History

IncomeStatement

Recommendation

Total Points

Answers for Investing for Kids Tutorial Worksheet

http://tqd.advanced.org/3096

Return to Using the Stock Market with Your Students

The Beginning:

1. They traded silver for paper saying they owned shares in cargo that came in every day.

2. During the Revolution, the government sold bonds to raise money for the war. Theycollected money in exchange for getting a profit in the future.

3. 1792

4. To sell shares in companies and and charge a commission or fee to buy and sell theseshares.

5. AMEX is the American Stock Exchange. It started when some stocks were not deemedgood enough so they were traded outside on the "curb."

How it Works:

1. A share of stock is simply a piece of paper that says you own part of a company.

2. A brokerage house is where you buy stock.

3. You call a broker. He calls a person of the floor of the stock exchange. They go to thespace that is allotted to that stock and he buys the amount requested. He then tells thefirm he bought it and you are notified.

Mutual Funds:

1. You turn over control of what you buy to professionals.

Rules:

1. SEC is a government agency that regulates the stock market. It tells what is legal andsets standards for brokers and investors.

Crashes:

1. A stock crash is when the price of stock falls a lot.

Market Trends:

1. A company may make or lose money

2. Interest rates--If interest rates are high the stock market is low

3. State of the economy--better economy means more money floating around with whichpeople can buy stock.

4. Time of year

5. Publicity

What is a Stock:

1. A stock is a representation of the amount of a company that you own.

2. A Proxy ballot is a ballot you mail into the company because you can’t be at thecompany meeting.

3. Penny Stocks--small companies that have almost no chance of making it big.

4. Growth Stocks--new companies with a lot of chance of success--risky.

5. Blue Chip Stocks--safest investment you can make but it takes more time to profitfrom them.

Types of Stock:

1. Common stock is the basic stock a corporation issues. It is directly influenced byfailures and success of the company.

Buying and Selling:

1. Public corporations mean that the public can buy and control the corporation. Privatecorporations are controlled by a small group of individuals or families.

San Jose Christian SchoolStock Market Simulation

Final Assessment

Name:_________________________

Key Vocabulary (Matching)

1) ____b____Stock

2) ____i____Dividend

3) ____g____Bull Market

4) ____j____Portfolio

5) ____f____Inflation

6) ____a____Shareholder

7) ____e____Stakeholder

8) ____d____Profit

9) ____h____Bear Market

10) ____c____New York Stock Exch.

a. The owner of shares of acompany

b. Units of ownership in a company

c. The largest auction marketsecurities in the nation

d. Earning or Income

e. A person that is affected by thebusiness

f. A period which the purchasingpower of the dollar is declining

g. A rising market

h. A decling market

i. Payment a company makes, incash or stocks, to its shareholder

j. All the securities held by anindividual or investment group

Reading Stock Tables (Answer the Following Questions)

On your computer, log onto finance.yahoo.com. Find the stock with the symbol: YHOOThe stock on your screen should be Yahoo!.

1) How much would you pay if you had bought 100 shares of Yahoo! at the last

day’s sales? _______________________________________________________

2) What was yesterday’s closing price for Yahoo!? __________________________

3) How many shares of Yahoo! were traded since the market opened this morning?

_____________________________________________________________________

4) If you bought 100 shares of Yahoo! at the lowest price of the year and sold it at

the highest price of the year, how much money would you make? (excluding any

commission fees)? _________________________________________________

_____________________________________________________________________

Christian Perspective (Fill in the Blank)

In three or more sentences, what does in mean to be good stewards of the money God

gave us?____________________________________________________________

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

According to Larry Burkett, what are the five steps to be good stewards of the moneyGod gave us?

1) Give it all to God____________________________________________________

2) Don’t Overspend____________________________________________________

3) Tithe Regularly_____________________________________________________

4) Don’t overdo it______________________________________________________

5) Avoid Snap Decisions________________________________________________

© 1997 Biblical Studies Press 1 http://www.bible.org

The Proverbsand the Idea of “Money”

byGreg Herrick, Th.M.

[email protected]

IntroductionThe Proverbs have a great deal to say about money and related topics such as giving, poverty, righteous-

ness and wisdom. The purpose of this study is to narrowly focus upon the issue of money and wealth in order todraw out, from the vast material in Proverbs, principles to help us in maintaining a Biblical lifestyle in relation tomoney.

A Representative List of Verses3:9, 10; 8:18-21; 10:4,15, 16, 22; 11:4, 24-26, 28; 13:7, 8, 11, 21, 22; 14:20, 23, 24; 15:6,16, 27; 16:8;

17:6; 18:11, 23; 19:4, 7; 21:5, 17; 22:1, 2, 4, 7, 9, 16; 23:4, 5; 27:24; 28:6, 8, 11, 22, 25; 30:8; 31:18.

Principles Fromthe Proverbs on Money

Honor God with your wealth.

• Prioritize your giving; give to Him first (3:9).

• God will often bless people materially who give first to him (3:10; 13:21).

Lesson 1: When it comes to money, put God first (Matt. 6:24).

Remember that wisdom is more important than money.

• Wisdom often brings enduring wealth (8:18, 21).

• Wisdom yields better fruit than money (8:20).

• Wisdom enables one to rightly use money (17:16).

• Wisdom gives one proper restraint in the pursuit of money (23:4).

Lesson 2: Ask God for wisdom in dealing with money (cf. James 1:5).

Remember that righteousness is more important than money.

• Righteous people can have great riches that involve no trouble (15:6).

• A poor, but blameless man (i.e. one who is righteous) is better off (i.e. before God) than a rich, but per-verse man (28:6).

• God often rewards the righteous with money (13:21).

• It is better to have a little money with righteousness than much with injustice (16:8).

Lesson 3: Seek uprightness in money matters (cf. 2 Cor. 8:21).

Remember that fearing God is more important than money.

• Fearing God is better than a lot of money (15:16)


• Humility and the fear of God often leads to the acquisition of money (22:4).

Lesson 4: Remember to whom we must give an account (Rom. 14:10)!

People, diligent at what they do, often acquire much wealth.

• Diligent people, in contrast to lazy people, often have more money (10:4).

• All hard work brings a profit whereas mere talk accomplishes nothing (14:23).

• Acquiring wealth takes diligent planning; anything less may end up in ruin (21:5).

• People who cannot control their spending habits end up with nothing (21:17).

Lesson 5: Plan for your financial future as far as it depends upon you.

Recognize the limitations of money.

• Money can do nothing to deliver someone from the wrath of God (11:4).

• Money is very temporal and lasts but a short time (23:5; 27:24).

• Money cannot be trusted in for it will lead to one's downfall (11:28). Trust, instead, in God (28:25).

Lesson 6: Be sober about money; keep it in perspective (1 Tim. 6:6-10)!

Recognize the potential for good that money properly used can have.

• Money can provide protection from certain problems and alleviate certain stresses (10: 15).

• Money can be left as an inheritance to help one's descendants in this life (13:22).

• An industrious wife can make sufficient money to help he family (31:18).

Lesson 7: Be prepared to use your money to good ends (cf. Phil. 4:14).

Recognize and avoid the evil that money can cause in relationships.

• Rich people tend to receive more attention from others than poor people do. There is often favoritism(14:20; cf. James 2:11ff).

• If you are rich, be careful of people who desire your friendship (19:4a).

• If you are poor, do not be surprised if people abandon you for a rich friend (19:4b; cf. 19:7).

• Those with money often become the target of thieves et al. (13:8).

• The poor person can often see through the facade of the rich person who thinks he knows it all (28:11).

• A good reputation with people is better than much money (22:1).

• Because of money people often try to pretend to be something they're not; they live a lie (13:7).

• Rich people often "lord it over" poor people (22:7).

Lesson 8: The rich and the poor must remember that God made them both (22:2); humility is the order ofthe day.

Giving generously often leads to acquiring further wealth and spiritual benefits, butpoverty awaits the stingy.

• Generosity, not stinginess often leads to having more money (11:24).

• Generosity often leads to the giver being spiritually refreshed (11:25).

• Those who are stingy often end up with nothing (11:24b;11:26b; 28:22).


Lesson 9: Give generously (2 Cor. 9:6, 7).

Money gained by unjust means leads to naught, whereas the monetary blessing of Godbrings no trouble.

• Money gained by dishonest means dwindles away fast (13:11).

• People who oppress others for money can come to poverty because of it (22:16a).

Lesson 10: Earn your money honestly (cf. Acts 24:16; 2 Thes. 3:7-9).

Be careful for greed.

• Greed for money can lead to family problems (15:27).

• Do not charge exorbitant interest; justice will prevail (28:8).

• Ask God for the proper amount of money (30:8).

Lesson 11: Search your heart before God that you might be aware of any greed (cf. Ephesians 5:3).

SummaryRemember that a biblical view of money begins by a commitment to honoring God first with our money

(I). Then we must keep in mind that wisdom, righteousness and the fear of God are more important than money (II-IV) and will enable us to perform the first principle more adequately, as well as the others (V-XI).

Greg Herrick graduated from Dallas Theological Seminary with the Th.M. in 1994 and is working on his Ph.D.Greg and his wife are transplanted Canadians living with their four children in North Texas.

Explaining the Stock Market to Kidsby Mark Kolakowski

With the gyrations of the market getting increasing news coverage inrecent years, any reasonably alert and aware youngster is bound towonder what it all means. Indeed, as a progressively broader segmentof the adult population invests in the stock market, more and more kidsundoubtedly are hearing family discussions about it. Here’s a handyQ&A session to help you deal with their inquiries.

Q: What is a corporation?

A: It’s one way in which a business can be organized. Virtually all thelarge businesses that you know (including household names like Ford,Sears and Coca-Cola) are corporations. Small businesses (like yourlocal hairdresser, plumber or diner) might be corporations, too, butoften they are either sole proprietorships or partnerships.

Just one person owns a sole proprietorship. Two or more people own apartnership. Note that ownership shares are not necessarily equal in apartnership. The firm of “Jack & Jill, Attorneys at Law” might beowned 70 percent by Jill and only 30 percent by Jack. Jill might merither greater share because she works longer hours, handles toughercases and/or contributed most of the money needed to set up theiroffice.

One disadvantage to setting up a business as a sole proprietorship or asa partnership is that the owners have unlimited liability. That means: ifthe business doesn’t have enough money to pay off what it owes toother businesses or persons, the owners themselves must do so out oftheir personal savings or property. In the case of a partnership, any onepartner might be held responsible for 100 precent of the firm’s debts ifthe others cannot pay.

If a business is organized as a corporation, however, the owners’personal assets normally are off-limits to creditors of the business. (Tobe technical, there now are various types of partnership that also limiteach individual partner’s liability.) Furthermore, the corporate structureis particularly well suited to very large businesses because it facilitates

ownership by a very large, ever-changing group of people.

Q: What is a share of stock?

A: As the term implies, when you own a share of stock you share in theownership of a corporation. What percentage of the corporation does ashare represent? That varies a lot across corporations. While each shareof a given corporation is of equal value, it’s entirely up to thecorporation to decide how many shares it issues. The very largestcorporations can have hundreds of millions of shares outstanding, inwhich case a single share represents ownership of a very tinypercentage of the company.

Q: What is a public company?

A: A public company is a corporation whose shares may be purchasedor sold by members of the general public on their own initiative. Acorporation that picks and chooses who can own its stock is, bycontrast, a private company. In this sense, a private company is rathersimilar to a partnership.

Q: What is the stock market?

A: It’s a shorthand term for all the buying and selling of stock that goeson. Here the term “market” is used in essentially the same sense as wespeak of the “market for oil” or the “market for automobiles.”

When people talk about “the market” being up or down on a given day,they normally are looking at an index that calculates the average pricemovements of a group of stocks. The most popular indexes include theDow Jones Industrial Average (it consists of 30 representativecompanies on the New York Stock Exchange), the S&P 500 (500 of thelargest public companies) and the NASDAQ index (which includesmany of the larger companies traded through dealers rather thanexchanges—see the next question).

Q: How is the price of a share of stock set?

A: Some stocks trade on exchanges (like the New York StockExchange), which are designed to move shares directly between buyersand sellers who have indicated a desire to trade at the same price. Theprocess is similar to an auction. Other stocks are traded throughsecurities dealers (this is the “over the counter” or OTC market, ofwhich the NASDAQ is a part), who buy shares from some investorsand then seek to resell them at slightly higher prices to others. This ismuch as antiques dealers work.

In either case, the price of a stock ultimately is determined by whatinvestors are willing to pay for it. And what they are willing to pay, inturn, depends on their assumptions about the company’s prospects forfuture profits (if profits seem headed up, the price should move up also,and vice versa). And their expectations of future profits depend a lot ongeneral economic conditions. That’s why there’s a tendency for themajority of stocks to move in the same general direction in response tobreaking world and national news.

Q: Is a $100 share expensive? Is a $1 share cheap?

A: You can’t judge a stock to be expensive or cheap based solely on itscurrent price. The former company may be highly profitable, with greatprospects for the future, while the latter firm might be losing moneyand headed for bankruptcy. The real question is whether a given shareprice represents good value for the money, in terms of the company’spresent profits and future outlook. Since no one can really foretell thefuture, smart investors might have highly different views.Unfortunately, there’s no single, simple formula to determine whetheror not a given stock represents a good value. This is why many peoplesay that investing is an art as much as a science.

Q: What are mutual funds?

A: They are groups of stocks bought by professional money managerson behalf of ordinary investors. Mutual funds are a way for investors todelegate investment decision making to an expert, while alsodiversifying. A diversified investor has money in a number of stocks,thereby reducing the chance of being hurt badly should a single stockfall sharply. By buying a mutual fund you are buying a piece of a wholegroup of stocks.

Q: What’s the secret to making money in the stock market?

A: Sorry, there’s no magic formula. As already mentioned, a lotdepends on predicting the future prospects for a given company orindustry, and even the best professionals have spotty records in thisregard. That said, those who learn how to save, who buy into qualitycompanies and who are patient (formulating their investment goals interms of years, even decades, rather than weeks or months) are most aptto succeed.

Now a freelance writer and consultant, Mark Kolakowski was formerlya Vice President in Merrill Lynch’s Wealth Management ServicesDivision.

http://www.weecareohio.com/

http://www.tribune-chronicle.com/

What Money Can & Cannot Buy

Food, but not an AppetiteMedicine, but not Health

A Bed, but not SleepA House, but not a Home

Decorations, but not BeautyLuxuries, but not Culture

Amusements, but not HappinessBooks, but not Wisdom

A Crucifix, but not a SaviorA Church pew, but not Heaven

—Source unknown

©2004 About, Inc. All rights reserved. A PRIMEDIA Company.http://quotations.about.com/cs/inspirationquotes/a/Money1.htm

A Select Collection of Money QuotesRobert Frost: Money Quotes A bank is a place where they lend you an umbrella in fair weather and ask for it backwhen it begins to rain.

Benjamin Franklin: Money Quotes A penny saved is a penny earned.

William A. Ward: Money Quotes Before you speak, listen. Before you write, think. Before you spend, earn. Before youinvest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit,try. Before you retire, save. Before you die, give.

J. Paul Getty: Money Quotes Buy when everyone else is selling and hold until everyone else is buying. That's not justa catchy slogan. It's the very essence of successful investing.

Norman Vincent Peale: Money Quotes Empty pockets never held anyone back. Only empty heads and empty hearts can do that.

Samuel Butler: Money Quotes Friendship is like money, easier made than kept.

Eleanor Roosevelt: Money Quotes He who loses money, loses much; He who loses a friend, loses much more; He wholoses faith, loses all.

Billy Graham: Money Quotes If a person gets his attitude toward money straight, it will help straighten out almostevery other area in his life.

Francis Bacon: Money Quotes If money be not thy servant, it will be thy master.

stock exchange

bear market

bull market

capitalism

dividend commission diversify corporation

investor risk portfolio profit

stocks shareholder stockbroker transaction

Developed by Laura Candler (Teaching Resources at http://home.att.net/~teaching)

a place where stocks and bonds

are sold

a time when stock prices are falling

a time when stock prices are rising

a system in which individuals are free to own, trade, and use things in order to

make a profit

money from a company’s profits that is paid to the

stockholders

the price a stockbroker charges to

take care of buying and selling stock

to buy a variety of stocks

a legally established company

someone who lends or gives money

in hopes of making a profit

the chance of losing money or assets

the group of stocks that you own

money that is made or gained as a result

of an investment

shares of ownership in a company

a person who owns shares (or stock) in

a company

a professional who is licensed to buy and sell stock

an exchange of goods, services, or money

Developed by Laura Candler (Teaching Resources at http://home.att.net/~teaching)

Stock Market Bibliography

A Select Collection of Money Quotes: ©2004 About, Inc. A PRIMEDIA Company.http://quotations.about.com/cs/inspirationquotes/a/Money1.htm

Investing for Kids Tutorial: © 1999 - 2000 PBS 45 & 49http://wneo.org/LessonActivities/stockmarket/default.htm

New York Stock Exchange: © 2001 New York Stock Exchange Inc. www.nyse.comIn connection with Lifetime Learning Systems: www.llsweb.com

Parent Magazine Online “Explaining the Stock Market to Kids.” Mark Kolakowskihttp://www.parentmagazineonline.com/stories/402stockmarket.asp

Principles and Standards for School Mathematics: © 2000-2004 by the National Councilof Teachers of Mathematics. http://standardstrial.nctm.org/document/chapter6/index.htm

Proverbs and the Idea of Money: Greg Herrick, TH.M. Copyright © 2004,www.Bible.org

Reading the Language of the Street: Web Portal For Educators. ©2004 Teachnology, Inc.www.teach-nology.com

Stock Market Vocabulary Game: Laura Candler. Teacher Resources athttp://home.att.net/~teaching

Stock Ownership: A Delicious Topic: activity 3 is adapted from The Stock Market GameGuide, published in 1990 by the Securities Industry Foundation for Economic Education,Inc., http://ecedweb.unomaha.edu/lessons/mark1.htm

ThinkQuest: Edustock: http://libray.thinkquest.org

Vocabulary from Starting and running a Profitable Investment Club by Thomas E.O”Hara and Kenneth S. Janke, Random House, 1998.

Whose Money Is It, Anyway?: Campus Life, March/April 2001 Vol. 59, No. 8, page 46.Larry Burkett.

Yahoo! Finance: www.finance.yahoo.com

New Fellow Education Transfer Plan Cover Sheet

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