Answers
Answers for Investing for Kids Tutorial Worksheet
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. They collected 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 these shares.
5. AMEX is the American Stock Exchange. It started when some stocks were not deemed good 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 the space that is allotted to that stock and he buys the amount requested. He then tells the firm 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 and sets 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 which people 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 the company 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 profit from them.
Types of Stock:
1. Common stock is the basic stock a corporation issues. It is directly influenced by failures and success of the company.
Buying and Selling:
1. Public corporations mean that the public can buy and control the corporation. Private corporations are controlled by a small group of individuals or families.