1. Financial Algebra
25 April 2018

2. announcements
I will be handing out your last homework assignment today
It will be due by May 4th
It won’t be hard, but you will need to access the internet to complete it
I will not be proctoring next week
I can finally finish this chapter (by Friday)
I can finally finish updating grades (everything should be up to date within the next day or so)

3. announcements You will be receiving your last take-home quiz on Friday
It will be due by May 8th (Seniors, this is the day of your final)
You will not need all of that time (it’s only 10 questions long)
Expect a study guide/Quizlet to be prepared for your final exam
Hopefully by this weekend (I’m working on the vocabulary terms now)
A link to it will be posted on the website as soon as it is finished

4. Key terms and vocabulary
Bond
Brokerage
Commission
Corporate bond
Coupon payment
Coupon rate
Discount brokerage
Diversification
Dividend
Face value
Federal agency bond
Full-service brokerage
Initial public offering (IPO)
Institutional investor
Junk bond
Municipal bond
Mutual fund
National Association of Security Dealers Automated Quotations (NASDAQ)
New York Stock Exchange (NYSE)
Primary market
Publicly traded
Secondary market
Securities and Exchange Commission (SEC)
Security
Shareholder
Treasury bonds

5. Stock exchanges
The last time I lectured, we introduced IPOs (initial public offering – the first sale of a company’s stock)
But unless you personally know someone involved in the company, it’s unlikely you’ll have access to an IPO
So, we have a secondary market
Secondary market: Organized trading centers where stock can be exchanged
New York Stock Exchange (NYSE), National Association of Security Dealers Automated Quotation System (NASDAQ) – U.S.
Nihon Keizai Shinbun (Nikkei Stock Average), Tokyo Stock Exchange (TSE) – Japan
Newspapers typically report these worldwide

6. New York Stock Exchange (NYSE)
Stock exchanges
New York Stock Exchange (NYSE)
National Association of Security Dealers Automated Quotation System (NASDAQ)
Has a centralized, seemingly chaotic location
While some exchanges are digital, there are also phone-, paper- and interpersonal-based communications (face-to-face) going on
It works remarkably well as a system for buying and selling stocks
When you place an order to buy stock in a company that is “listed”—bought and sold—on the NYSE, that order flows through that chaotic market, and your order is carried out
This is a stock exchange without a central location
This exchange is an electronic network of dealers who buy and sell stocks
Each day that trading occurs, the stock exchanges publish the prices at which stocks trade
Relatively ordered, but consider the issues that might arise if computers go down

7. Investor behaviors
There are specialized terms used to refer to how the market is responding:
“Bull” and “Bear” are the most-commonly known terms you hear investors use
A “Bull market” is a term used for markets that are treading upward
Things that can contribute: Strong economic growth, low interest rates, low inflation, strong industry conditions, decisions that foster growth in businesses
In this market, there is strong demand for stocks but probably not enough supply to satisfy the demand
A “Bear market” is a term for markets that are trending down (signs of a recession)
Things that can contribute: Weak economy, high interest rates, high inflation, weak industry conditions, improper decisions that hinder business growth
In this market, there is weak demand for stocks in spite of ample supply to satisfy the demand

8. Investor behaviors Why does any of this matter?
Well, you are actually the people investing…
Directly or indirectly, that’s your money at risk
Shareholder: A person that owns stock in a company
Dividends: The distribution of profits that shareholders are due
Dividends are another way some stockholders make money in the stock market
Companies pay dividends in cash, or sometimes, in additional stock
Which brings me to your final homework assignment…