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How to Buy & Sell Stocks & Bonds
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Where are stocks bought & sold? NYSE – oldest & largest stock exchange OTC- over the counter market Traded through brokers Bonds are usually sold here
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Activity 1 Without financial markets individuals would find it very difficult to trade their stocks and bonds. Get a copy of Activity 1 from the Investing 3 ring binder
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Activity 1 continued How do financial markets help sellers like Veronica and buyers like Ron? They reduce the costs of trading for sellers & buyers. They provide information about potential trading partners They supply more than 1 buyer or seller so that competition can establish a price satisfactory to both parties in the transaction.
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Activity 2 Read the play together
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Where to buy stocks & bonds Full Service Brokerage Firms Give investment advice Offer a wide variety of financial products & services Charge higher commissions Discount Brokerage Firms Do not give investment advice Offer limited number of financial products and services Charge Lower commissions Buying Online Buyers pay lower commissions Buyers can more easily compare brokerage services Dividend reinvestment plans(DRIPS) Many large companies offer DRIPs Stockholders are paid dividends in the form of stock No commission fee is charged.
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What kind of investor would benefit most from dealing with a full-service broker? Someone who is not very knowledgeable about what stocks to buy and does not want to take the time to research individual stocks.
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Answer and Turn In What is the NYSE? Less than ½ of all stocks are traded on exchanges file the NYSE. How are the rest traded? What role do brokers play in buying and selling stocks?
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