5.6.1: The Stock Market
Lesson
Let's learn about the stock market.
Exercise \(\PageIndex{1}\): Revisiting Interest and Depreciation
- Lin deposited $300 in a savings account that has a 2% interest rate per year. How much is in her account after 1 year? After 2 years?
- Diego wants to sell his bicycle. It cost $150 when he bought it but has depreciated by 15%. How much should he sell it for?
Exercise \(\PageIndex{2}\): Gains and Losses
-
Here is some information from the stock market in September 2016. Complete the table.
company value on day 1 (dollars) value on day 2 (dollars) change in value (dollars) change in value as a percentage of day 1 value Mobile Tech Company \(107.95\) \(111.77\) \(3.82\) \(3.54\)% Electrical Appliance Company \(114.03\) \(2.43\) \(2.18\)% Oil Corporation \(26.14\) \(25.14\) \(-3.83\)% Department Store Company \(7.38\) \(7.17\) Jewelry Company \(70.30\) \(2.27\)% Table \(\PageIndex{1}\) - Which company's change in dollars had the largest magnitude?
- Which company's change in percentage had the larges magnitude?
Exercise \(\PageIndex{3}\): What is a Stock Portfolio?
A person who wants to make money by investing in the stock market usually buys a portfolio, or a collection of different stocks. That way, if one of the stocks decreases in value, they won’t lose all of their money at once.
-
Here is an example of someone’s stock portfolio. Complete the table to show the total value of each investment.
name price (dollars) number of shares total value (dollars) Technology Company \(107.75\) \(98\) Airline Company \(133.54\) \(27\) Film Company \(95.95\) \(135\) Sports Clothing Company \(58.96\) \(100\) Table \(\PageIndex{2}\) -
Here is the same portfolio the next year. Complete the table to show the new total value of each investment.
company old price (dollars) price change new price (dollars) number of shares total value (dollars) Technology Company \(107.75\) \(+2.43\)% \(98\) Airline Company \(133.54\) \(-7.67\)% \(27\) Film Company \(95.95\) \(87.58\) \(135\) Sports Clothing Company \(58.96\) \(-5.56\)% \(100\) Table \(\PageIndex{3}\) - Did the entire portfolio increase or decrease in value over the year?
Exercise \(\PageIndex{4}\): Your Own Stock Portfolio
Your teacher will give you a list of stocks.
- Select a combination of stocks with a total value close to, but no more than, $100.
- Using the new list, how did the total value of your selected stocks change?