1. Exam Next Week
Study now
Do WebStudy quiz for class after exam.

2. Financing and Investing

3. Financial Pages Cash instruments normally just show interest rates
Annual Percentage Rate
compare APRs
CDs will also show term length
CDs
Yield
1 month
3 month
6 month
9 month
1 year
18 month
2 year
3 year
5 year
7 year
10 year
New CDs —
0.30%
0.35%
0.40%
0.55%
0.80%
1.10%
1.75%
2.25%
2.75%
Source: 7/2/2013

4. Bond Quotes Coupon – the interest rate ‘printed’ on the bond
YTM – yield to maturity. The computed rate you get if you hold a bond to
maturity
Bonds are usually denominated in $1,000 amounts (face (par) value)
Price – a percent of the face value
Cur Yld – current yield = interest payment / current price
Moody, S&P – ratings given by these bond rating companies
Source: 2/27/12

5. Stock Quotations
Source: finance/yahoo.com 1/12/17

6. Stock Quotes Bid – what a person is willing to pay
Ask – what a person wants for the stock
Market Cap – Value of the company = price x (# shares)
P/E – Price/earnings ratio = price / EPS
The higher the P/E, the more the market thinks the company’s profits will grow
EPS – earnings per share,
the profit on one share of stock = net income / # shares
Dividend – dividend paid per share of stock
( N/A means no dividends are paid )
Yield – dividend / price. ( N/A means no dividends are paid )

7. Equities P/E ratio ratio of price to earnings
a common comparison of stocks and markets
high P/E means expect growth
Dividends
Growth / Income tradeoff
What would be your corporate policy, why?
Affects taxes for investors
how?
Yield = dividend / price

8. Stock Indexes Reflect the general activity of the stock market
Most common indices
Dow Jones Industrial Average (the Dow or DJIA),
Standard & Poor’s 500 (S&P 500),
NASDAQ composite
Foreign indices
DAX (Germany)
FTSE, FT-100 or “Footsie” (London),
Nikkei (Tokyo)

9. Mutual Funds Mutual Funds
Investors pool their money to buy investments
Investors become part owners of a large number of securities,
lessen their individual risk
Index funds / Managed Funds
Load / No Load Funds

10. Mutual Fund Quotes NAV – net asset value, i.e. the price
Net assets – amount invested in the fund
Yield – dividends paid / mutual fund share price
Source: finance/yahool.com, 2/23/12

11. Discussion Efficient markets
markets reflect the collective wisdom of all investors
can you beat the market?
what do you know that people who have millions or billions at stake do not?
index funds
why are ethics important in this context?

12. In-Class Watch CNBC Understand the ticker Understand the indexes
Listen and understand the discussion
Look at
bloomberg.com
cnbc.com