Selling Stocks & Bonds Lesson 27.

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Presentation transcript:

Selling Stocks & Bonds Lesson 27

Selling Stocks 27a

Stocks are constantly being bought and sold Stocks are constantly being bought and sold. The result can be a profit or a loss. Profit = Make Money Loss = Lose Money

Find net sale of Stock… Net Sale = Amt. of Sale - Commission Find Profit… Profit = Net Sale - Total Paid Find Loss… Loss = Total Paid - Net Sale

Amt. of Sale - Commission = 33.50(90) – 32.54 = $2,982.46 You had paid $3,250.45 for 90 shares of stock. You sold the stock at $33.50 per share and had to paid a sales commission of $32.54. Find the net sale. Find profit or loss Net Sale = Amt. of Sale - Commission = 33.50(90) – 32.54 = $2,982.46 Loss = Total Paid – Net Sale = 3,250.45 – 2,982.46 = $267.99 loss

Amt. of Sale - Commission = 51.52(125) – 17.50 = $6,422.50 You had paid $5,975.40 for 125 shares of Wal-Mart stock. You sold the stock at $51.52 per share and had to paid a sales commission of $17.50. Find the net sale. Find profit or loss Net Sale = Amt. of Sale - Commission = 51.52(125) – 17.50 = $6,422.50 Profit = Net Sale – Total Paid = 6,422.50 – 5,975.40 = $447.10 profit

Bonds 27b

Some corporations and governments raise money by issuing bonds Some corporations and governments raise money by issuing bonds. These bonds are IOU’s saying you will be paid back your amount plus interest. Invest in bonds Part owner in stocks

Find Bond Cost… Bond Cost = Face Value * Percent Find Annual Interest… Annual Interest = Face Value * Interest Rate Find Annual Yield… Annual Interest Annual Yield = Bond Cost

Face Value x Interest Rate = 2,000(.065) = $130 You bought $2000 bond at the quoted price of 91.5. The bond paid interest at a rate of 6.5%. Find the annual interest. Find the bond cost. Find the annual yield. Ann. Int. = Face Value x Interest Rate = 2,000(.065) = $130 Bond Cost = Face Value x Percent = 2000(0.915) = $1830 130 1830 Annual Yield = = 7.1%

Face Value x Interest Rate = 1,500(.085) = $127.50 You bought $1500 bond at the quoted price of 85.5%. The bond paid interest at a rate of 8.5%. Find the annual interest. Find the bond cost. Find the annual yield. Ann. Int. = Face Value x Interest Rate = 1,500(.085) = $127.50 Bond Cost = Face Value x Percent = 2000(0.855) = $1282.50 127.50 1282.50 Annual Yield = = 9.94%

27: Selling Stocks and Bonds Questions Summarize your notes Homework Worksheet