1. Ch. 6.2: Investing - Taking Risks With Your Savings
ECONOMICS
Ch. 6.2: Investing - Taking Risks With Your Savings
Learning Target: Understand the different types of investments and the risks involved

2. ECONOMICS Ch. 6.2: Investing - Taking Risks With Your Savings Learning Target: Understand the different types of investments and the risks involved
Success Criteria
You should be able to…
1. Describe several types of investments
2. Explain any risks involved with the investments you described
3. Explain the relationship between risk and reward

3. Stock

4. Stock
A share of a company, also called securities. Holders of stock become part owners of the company.

5. How are corporations formed?

6. How are corporations formed?
By selling shares of stock. This gives the company money to expand.

7. Stockholders

8. Stockholders
The owners of stock. Can make money by selling when the price is up or lose if the stock price goes down (and they sell it).
May receive dividends.

9. Dividends
Money the stockholder receives from the company based on how much stock is owned. Usually paid when the company does well.

10. Capital gain
Increase in the value of an asset (such as stock) from the time it is purchased to the time it is sold.

11. Capital loss
Decrease in the value of an asset (such as stock) from the time it is purchased to the time it is sold.

12. SUMMARIZE 1. What do you have if you own a share of a company?
Discuss at your table & answer on your response sheet.
1. What do you have if you own a share of a company?
2. What is a corporation.
3. What is a dividend?
4. What is the difference between a capital gain and a capital loss?
Are you on target (white, black, blue, red or yellow)?
Did you hit the bullseye?
Learning Target: Understand the different types of investments and the risks involved

13. ECONOMICS Ch. 6.2: Investing - Taking Risks With Your Savings Learning Target: Understand the different types of investments and the risks involved
Success Criteria
You should be able to…
1. Describe several types of investments
2. Explain any risks involved with the investments you described
3. Explain the relationship between risk and reward

14. Bonds
A certificate issued in exchange for borrowing money.

15. Bonds
A certificate issued in exchange for borrowing money. Businesses and governments may sell bonds.
They pay interest and have a maturity date.

16. Bonds
A certificate issued in exchange for borrowing money. Businesses and governments may sell bonds.
They pay interest and have a maturity date. You do not get any ownership in the entity as you do with stock.

17. Tax-exempt bonds
Bonds sold by local and state governments. Purchasers do not pay federal tax on the interest.

18. Savings bonds

19. Savings bonds
A bond issued by the federal government.

20. Savings bonds
A bond issued by the federal government. They are purchased for ½ the face value ($50 for a $100 bond) and will be worth the face value on the maturity date. Very safe, but not a great investment.

21. Treasury Bills
(T-Bills)
Certificates issued by the U.S. Treasury with maturities of less than 1 year. Minimum amount of $1,000.

22. Treasury Notes
(T-Notes)
Certificates issued by the U.S. Treasury with maturities of 2 to 10 years. Minimum amount of $1,000.

23. Treasury Bonds
(T-Bonds)
Certificates issued by the U.S. Treasury with maturities of 30 years. Minimum amount of $1,000.

24. SUMMARIZE 5. What is the difference between a stock and a bond?
Discuss at your table & answer on your response sheet.
5. What is the difference between a stock and a bond?
6. Who sells tax-exempt bonds?
7. Explain how a U.S. Savings Bond works.
8. Explain the similarities and differences between T-bills,
T-notes and T- bonds.
Are you on target (white, black, blue, red or yellow)?
Did you hit the bullseye?
Learning Target: Understand the different types of investments and the risks involved

25. ECONOMICS Ch. 6.2: Investing - Taking Risks With Your Savings Learning Target: Understand the different types of investments and the risks involved
Success Criteria
You should be able to…
1. Describe several types of investments
2. Explain any risks involved with the investments you described
3. Explain the relationship between risk and reward

26. Broker
A person who is the go-between for buyers and sellers of stock. You pay them a fee to purchase stock.

27. Over-the counter market
An electronic marketplace for stocks (such as the NASDAQ) not listed on the major organized stock exchanges (like the Dow Jones).

28. Stock market indexes
A list of specific companies stock prices and any increase or decrease in price. Such as the Dow Jones Industrial Average or “The Dow”.

29. Mutual funds
An investment in a company that pools the funds of many individuals to buy stocks, bonds, or other investments.

30. Mutual funds
An investment in a company that pools the funds of many individuals to buy stocks, bonds, or other investments. Most mutual funds hold a variety of stocks and bonds (diversified). Not insured by the Feds.

31. Money market fund
A type of mutual fund that buys the short-term debt of businesses and banks.

32. Why and how are securities markets regulated?
Regulation is to protect investors from a stock market crash (like the one in 1929).

33. Why and how are securities markets regulated?
Regulation is to protect investors from a stock market crash (like the one in 1929).
The Securities and Exchange Commission (SEC) – Investigates dealings between corporations and mergers.

34. SUMMARIZE 9. What is the over the counter market?
Discuss at your table & answer on your response sheet.
9. What is the over the counter market?
10. What is “The Dow”?
11. Explain what a mutual fund is.
12. What is the SEC and what is its job?
Are you on target (white, black, blue, red or yellow)?
Did you hit the bullseye?
Learning Target: Understand the different types of investments and the risks involved

35. ECONOMICS Ch. 6.2: Investing - Taking Risks With Your Savings Learning Target: Understand the different types of investments and the risks involved
Success Criteria
You should be able to…
1. Describe several types of investments
2. Explain any risks involved with the investments you described
3. Explain the relationship between risk and reward

36. Pair Share p
1) Read about either Stocks or Bonds
2) Share with your partner
3) Answer the question