STOCK MARKET

Two Things to do with Money Income not used for consumption Income today that allows future benefit INVESTMENTSAVE

What is a Financial Intermediary? A financial institution that collects funds from savers & then invests that money in loans & other financial assets

Financial Intermediaries Commercial Banks Savings and Loans Credit Unions Finance Companies Mutual Funds Pension Funds Life Insurance Companies savings loans assets Interest & dividends SaversBorrowers

Financial System consists of: Banks Stock Markets Bond Markets Insurance Markets

A ____________ of a ______________which can be bought, sold, or traded as an investment Stock COMPANY SHARE

Shareholder A _______________ or institution that ___________ a share of stock in a corporation PERSON OWNS

Stock Exchange A secondary market where securities (stocks & bonds) are bought and sold

American Stock Exchange (AMEX) Third largest stock exchange Located in NYC Is traditionally where smaller companies & new companies start Requirements are much less strict than those on NYSE

NASDAQ Second largest stock exchange in the U.S. _____________ (computerized) stock market listing of over 5,000 companies Many ________________company stocks are sold here Electronically tech

New York Stock Exchange (NYSE) Is considered a ______________exchange b/c all trades must be made on the ___________________________ Largest & oldest exchange Minimum Qualifications Earning Power Assets Market value of common stock $18 million 1.1 million publicly held shares At least 2,000 shareholders centralized Exchange floor

Dow Jones Industrial Average (DIJA) A measure of stock market prices based on the weighted average of _____________ ________________________ on the NYSE. Dow is measured in ___________ that represent dollars Dow 30 Companies - CNNMoney 30 leading stocks points

S&P 500 An average of 500 popular stock prices used to represent the level of general stock prices Considered a more accurate measure of the U.S. stock market than the Dow Jones

Securities and Exchange Commission (SEC) Federal agency established in 1934 to protect investors and enforce laws in the securities (stocks & bonds) industry.

Bull Market Stock prices are rising Hints Wide Low Heavily traded 15 Below 30

Bear Market Stock prices are falling

Day Trader Constantly trading online to make a living

Dividend Company shares profits with Stockholders Payments may be in the form of cash or stocks Considered income so it is taxable

Stock Split When a company divides its shares in smaller, more economical shares. The most common split ratios are 2-for-1 and 3-for-1, which means that the stockholder will have two or three shares for every share held earlier. The price of the new shares is adjusted downward. Stock splits are usually done to attract new investors.

Capital Gains Profit that is made from selling an asset Considered income so it is taxable

Mutual Fund A pool of money managed by an investment company that gathers money from individual investors and purchases a range of financial assets

Parent Company A company that controls other companies by owning at least 50% of voting stock Ex: General Mills Kraft Johnson & Johnson Pepsi Co

STOCK MARKET GAME