UPDATE:
Top Five Stock Market Game Stocks - Spring 2017
5. Esperion Therapeutics Inc.: Headquartered in Ann Arbor, MI, this biopharmaceutical company researches and develops therapies that reduce elevated LDL-C levels in patients' blood.
4. Aurinia Pharmaceuticals Inc.: This late-stage biopharmaceutical company focuses on treatments for patients suffering from debilitating diseases such as lupus nephritis.
3. TG Therapeutics Inc.: The development of treatments for B-cell malignancies and autoimmune diseases is the goal and focus of this company. It is currently developing two therapies targeting hematological malignancies and autoimmune diseases.
2. Global Blood Therapeutics Inc.: This South San Francisco company is dedicated to discovering, developing, and commercializing novel therapeutics to transform the treatment of patients with grievous blood-based disorders.
And the winner is...
1. Pulse Biosciences Inc.: A development-stage medical device company utilizing a technology called Nano-Pulse Stimulation or NPS to induce cell signaling and the activation of cellular pathways in tissue.
4. Aurinia Pharmaceuticals Inc.: This late-stage biopharmaceutical company focuses on treatments for patients suffering from debilitating diseases such as lupus nephritis.
3. TG Therapeutics Inc.: The development of treatments for B-cell malignancies and autoimmune diseases is the goal and focus of this company. It is currently developing two therapies targeting hematological malignancies and autoimmune diseases.
2. Global Blood Therapeutics Inc.: This South San Francisco company is dedicated to discovering, developing, and commercializing novel therapeutics to transform the treatment of patients with grievous blood-based disorders.
And the winner is...
1. Pulse Biosciences Inc.: A development-stage medical device company utilizing a technology called Nano-Pulse Stimulation or NPS to induce cell signaling and the activation of cellular pathways in tissue.
What would you do with $100,000?
How much is $100,000?
Your job is to select $100,000 worth of merchandise online that you would buy. It can be toys, clothes, or food – anything appropriate you want. You can buy multiple quantities of the same item. It is up to you. The only thing you must do is to spend the entire $100,000.
Track the items you would invest in and their prices on Microsoft Excel until you reach your total. Then submit it to Engrade.
Introduction to the Stock Market Game:
The goal of this activity was to have you understand the concrete “value” of $100,000.
Everyone is going to be given $100,000 in virtual cash to invest in companies you believe will make the most money over the coming weeks. You will also be able to buy bonds and mutual funds.
Three Major Stock Exchanges:
Watch the video below before getting started:
What is a Company?
A company is a business or association usually formed to manufacture or supply products or services for profit. A company can be a partnership, a limited liability partnership (LLP), a corporation or owned by a single individual.
All companies are set up in accordance with government regulations. In a partnership the partners share the profits or losses of the business in which they have all invested; they are personally liable for the company’s debt. A limited liability partnership (LLP) transfers much of the firm’s personal liability from the partners to the partnership, for example, accounting and law firms are generally set up as limited liability partnerships.
Public Corporation:
A public corporation is a company with publicly traded shares that anyone can buy in a stock market. A public corporation is also legally separated from the stockholders who own it and the managers who run it. A corporation offers these advantages:
• Stockholders’ are not responsible for the company’s debt;
• A corporation continues to exist even if its stockholders or managers change;
• Stockholders can easily sell their ownership shares through the stock market.
Private Corporation:
A private corporation may be owned by an individual or privately sell stock to fund the business. The partners in the company are called shareholders. They receive shares for their contributions to the business. Shareholders have ownership and some decision making power in the company. The company does not sell shares to the public; you cannot buy shares of a private company on the stock market.
What is a Stock?
Stocks represent a share of ownership in a publicly held company. Private companies do not issue stock. As a stockholder, the investor has a claim on the assets of the company in exchange for money paid for the stock. The stockholder also shares with the original owners in the company’s wealth along with the risks. No matter how few shares of stock you own, you are part owner of the company.
Most people buy stock to make money by: earning dividends (cash paid to investors from the company’s profits) or selling the stock at a higher price. Shareholders have limited liability: they can only lose the money they invested in the company should the corporate fail.
Stockholders should make investment decisions based upon their “risk tolerance.” A number of issues contribute to an investor’s overall risk tolerance, including the investor’s age, health and their overall financial outlook. An investment with some risk but great potential for return might be a good investment for someone who is 28 and financially stable, but not for someone who is sixty and plan to retire in five years.
Most people buy stock to make money by: earning dividends (cash paid to investors from the company’s profits) or selling the stock at a higher price. Shareholders have limited liability: they can only lose the money they invested in the company should the corporate fail.
Stockholders should make investment decisions based upon their “risk tolerance.” A number of issues contribute to an investor’s overall risk tolerance, including the investor’s age, health and their overall financial outlook. An investment with some risk but great potential for return might be a good investment for someone who is 28 and financially stable, but not for someone who is sixty and plan to retire in five years.
The Two Forms of Stock:
Common Stock
Common stock provides its holder with the right to vote on major company issues and on who will serve on the company’s board of directors. Common stock is usually more prone to rapid changes in its value than is preferred stock. Therefore, there is more risk associated with common stock than preferred
Preferred Stock
Holders of preferred stock usually do not have voting rights and the stock usually does not grow or drop in value as much as common stock. It is usually more expensive than common stock. If the company issues dividends, preferred stock holders are always paid first—before holders of common stock—and they are guaranteed a portion of the profits if dividends are declared.
What is an Initial Public Offering (IPO)?
When a company reaches a certain stage in its growth, it may decide to issue stock, or go public, with an initial public offering (IPO). The goal may be to raise capital, to provide liquidity for the existing shareholders, or a number of other reasons. Any company planning an IPO must register its offering with the Securities and Exchange Commission (SEC). In most cases, the company works with an investment bank, which underwrites the offering. That means marketing the shares being offered to the public at a set price with the expectation of making a profit.
Assignment 1: The Best and the Worst
Visit this link to view the best and worst IPOs (Initial Public Offerings) of 2015. Pick one from each list then answer the following questions by typing your response in Microsoft Word:
Please submit your answers to Engradepro when you are finished.
- What products and/or services does the company provide? (Research online to find more information)
- Why do you think the companies chose to go public?
- What has happened to the stock price since the decision to go public?
- Would you invest in this company? Why or why not?
Please submit your answers to Engradepro when you are finished.
QUIZ
**Review what you have learned until now and then log in to Engradepro and go to the quizzes section to take a true/false quiz**
**Review what you have learned until now and then log in to Engradepro and go to the quizzes section to take a true/false quiz**
What is Risk?
Every investment carries risk. Each investor must determine his/her risk tolerance—is he/she a conservative, moderate or speculative investor? A number of factors including age and financial stability are important elements in determining a person’s risk tolerance.
Conversely, all stocks carry some risk and the more information an investor has about a stock’s risk level, the better that investor can determine whether it is compatible with his/her personal risk tolerance.
A stock’s beta number is one way investors can estimate the level of a stock’s risk. However, no measure of risk or volatility is fool-proof or consistently accurate. The beta—a measure of a stock’s volatility—shows of how a particular stock's price moves in relation to the market as a whole. There are betas for individual stock and for industries. A beta number greater than 1 is considered high risk.
In short, the higher the beta, the more volatile the stock; the lower the beta the more stable the stock compared with the market.
Types of Risk:
Conservative Risk (Low): Means taking limited risk on secure stocks and fixed income investments. Fixed Income stocks are generally low stocks that pay higher than average dividends (4% or higher). A dividend is money paid out to the owner of a stock based on the profit of a company. The value or price of the stock does not change quickly.
Moderate Risk: Growth stocks—stocks that grow faster and higher (value and price) than stocks of other companies with similar sales and earnings—are considered to be of moderate risk.
Speculative Risk (High): Stocks that carry major risks on investments with unpredictable results, but the potential to earn very high returns. When investing in speculative stocks, the investor must realize that while there is a chance of great returns, there is also the possibility for great loss.
Assignment 2: Risk Assessment
Your job will be to decide if certain investments are conservative, moderate or speculative risks.
Download and save the file below and submit your answers to Engradepro:
Download and save the file below and submit your answers to Engradepro:
risk_assesment_assignment.docx | |
File Size: | 14 kb |
File Type: | docx |
What is Diversification?
An investment strategy in which you spread your investment dollars among industry sectors. Because it is very difficult to accurately predict how any one company will perform over time, diversification is a strategy that helps to protect your portfolio. It is a widely used and highly successful way to reduce risk. By investing in different types of stocks, bonds, and/or mutual funds, the value of your entire portfolio should not be wiped out if one investment fails.
What are Mutual Funds?
A mutual fund is a collection of stocks, bonds and other securities owned by a group of investors and managed by a professional investment advisory firm. The investment firm collects money from investors, pools it and invests it. The mutual fund manager, working with a team of analysts, decides which stocks and securities to include in the fund, often investing in 100 or more securities.
Mutual funds fit the needs of people with a variety of risk tolerances—from the very conservative to the more speculative. Every day the fund's managers and analysts evaluate the performance of each security and how current economic, social and political events might affect their holdings. Based on these factors, the fund manager decides which securities in the fund to keep or sell.
What are Bonds?
A bond is like an IOU for a loan you’ve made to an institution like the government or a corporation. Similar to when you take out a car loan or a mortgage, when the government or a corporation borrows money from you they do so for a certain period of time at a certain rate of interest.
When you purchase a bond you are lending money to the issuer, who can be a corporation, the government or a government agency. In return for the loan the issuer promises to pay you ( the bond investor) a specific rate of interest known as the “coupon rate”. You are paid the interest on a predetermined schedule (usually quarterly) for the life of the bond. The life of a bond refers to the period of time the issuer has to repay the investor. The issuer also promises to repay the face value when the bond matures (i.e., comes due). The face value is also known as “the principal” or the “par value.” Most bonds are issued with a $1000 face value.
Bonds are also known as fixed-income investments because the investor knows the rate of interest and the interest payment schedule in advance of purchase. Bonds are often included in a diverse investment portfolio. There are a variety of bonds available. Described below are the bonds most familiar to individual investors:
Corporate bonds - Bonds are major sources of corporate borrowing. Debentures, the most common type of corporate bond, are backed by the general credit of the corporation, while assetbacked bonds are backed by specific corporate assets, such as property or equipment.
Municipal bonds - Millions of bonds have been issued by state and local governments. General obligation bonds are backed by the full faith and credit of the issuer, and revenue bonds by the income generated by the particular project being financed.
Agency bonds - Some government sponsored but privately owned corporations (like Fannie Mae and Freddie Mac), and certain federal government agencies (like Ginnie Mae and Tennessee Valley Authority) issue bonds to raise funds either to make loan money available or to pay off new projects.
U.S. Treasury bonds - US Treasury bonds are backed by the full faith and credit of the United State government. When the government spends more than it collects in taxes and other revenues, it issues Treasury notes, bills, and bonds to borrow the money to pay the difference. Treasury bonds have the longest term or period of time before the loan must be repaid (10 years or more). Treasury bills have the shortest (less than two years)
Assignment 3: Bonds, Bonds, Bonds
Download and answer the questions to the worksheet located below in Microsoft Word
about_bonds.pdf | |
File Size: | 51 kb |
File Type: |
What Stock Exchanges are used in the Stock Market Game?
The stock exchanges are a lot like malls. They give you a lot of choices. In the Stock Market Game you have two stores (exchanges) from which to choose stocks, the New York Stock Exchange (NYSE) and the NASDAQ. Like malls give us places to buy different kinds of shoes; stock exchanges provide buyers and sellers with the opportunity to trade the stocks of different types of companies.
All companies have to satisfy certain requirements in order to be listed on a particular stock exchange. Listing means its shares can be bought and sold on the exchange for which it qualifies. If a company’s stock fails to meet these requirements, the exchange may delist them. This means the stock is no longer traded on that exchange.
The reason why a company’s stock is traded on one exchange and not another has a lot to do with a company’s size. As an investor the company size and history can give you information about the company’s stock.
All companies have to satisfy certain requirements in order to be listed on a particular stock exchange. Listing means its shares can be bought and sold on the exchange for which it qualifies. If a company’s stock fails to meet these requirements, the exchange may delist them. This means the stock is no longer traded on that exchange.
The reason why a company’s stock is traded on one exchange and not another has a lot to do with a company’s size. As an investor the company size and history can give you information about the company’s stock.
Assignment 4: Stock Exchanges
Create a chart comparing the NASDAQ and New York Stock Exchange that is similar to the chart below. Research online to fill in the missing information.
How Do You Read a Stock Quote?
Example:
All information and activities taken from stockmarketgame.org
Assignment 5: Stock Quotes
After learning about how to read stock information fill out the worksheet below to test your skills.
stock_quotes.docx | |
File Size: | 138 kb |
File Type: | docx |
Are you ready to invest?
Research and decide on the companies you want to invest in for the Stock Market Game.
In order to get your account information you must fill out and submit the form below.
In order to get your account information you must fill out and submit the form below.
mystockchoices.docx | |
File Size: | 21 kb |
File Type: | docx |