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1 The Stock Market

2 Photo Sources: PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.. 2

3 What is the Stock Market? What is a stock? 2013 PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This. 3

4 What is the Stock Market? What is a stock? A stock is a share in the ownership in a company PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This. 4

5 What is the Stock Market? What is a stock? A stock is a share in the ownership in a company. Who sells stocks and why? 2013 PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This. 5

6 What is the Stock Market? What is a stock? A stock is a share in the ownership in a company. Who sells stocks and why? A company that needs more cash flow to expand the company might sell stock PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This. 6

7 What is the Stock Market? What is a stock? A stock is a share in the ownership in a company. Who sells stocks and why? A company that needs more cash flow to expand the company might sell stock. Who buys stocks and why? 2013 PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This. 7

8 What is the Stock Market? What is a stock? A stock is a share in the ownership in a company. Who sells stocks and why? A company that needs more cash flow to expand the company might sell stock. Who buys stocks and why? Any investor can buy stock to try to make money PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This. 8

9 What is the Stock Market? What is a stock? A stock is a share in the ownership in a company. Who sells stocks and why? A company that needs more cash flow to expand the company might sell stock. Who buys stocks and why? Any investor can buy stock to try to make money. What causes stock prices to change? 2013 PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This. 9

10 What is the Stock Market? What is a stock? A stock is a share in the ownership in a company. Who sells stocks and why? A company that needs more cash flow to expand the company might sell stock. Who buys stocks and why? Any investor can buy stock to try to make money. What causes stock prices to change? Supply and Demand: If the demand for the stock increases, the price of the stock increases. If the demand decreases, the price of the stock also decreases PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This. 10

11 Case Studies etoys, Inc. Facebook, Inc PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This. 11

12 Calculating Profit and Loss To determine the amount of profit or loss: 1. Calculate the amount paid for the stock by multiplying the number of shares by the purchase price per share. 2. Calculate the amount the stock sold for by multiplying the number of shares by the selling price per share. 3. Subtract the total of #1 from the total of #2. This amount is your gain or loss PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This 12

13 Calculating Profit and Loss Apple Since Manuel bought 5 shares, he paid 5 x $86 = $ PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This 13

14 Calculating Profit and Loss Apple Since Manuel bought 5 shares, he paid 5 x $86 = $430. He sold the 5 shares at $342 each, so he received 5 x $342 = $1, PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This 14

15 Calculating Profit and Loss Apple Since Manuel bought 5 shares, he paid 5 x $86 = $430. He sold the 5 shares at $342 each, so he received 5 x $342 = $1,710. $1,710 $430 =? 2013 PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This 15

16 Calculating Profit and Loss Apple Since Manuel bought 5 shares, he paid 5 x $86 = $430. He sold the 5 shares at $342 each, so he received 5 x $342 = $1,710. $1,710 $430 =? Manuel made a profit of $1, PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This 16

17 Calculating Profit and Loss The Home Depot Since Manuel bought 10 shares, he spent 10 x $40 = $ PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This 17

18 Calculating Profit and Loss The Home Depot Since Manuel bought 10 shares, he spent 10 x $40 = $400. He sold the shares for $36 each, so he earned 10 x $36 = $ PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This 18

19 Calculating Profit and Loss The Home Depot Since Manuel bought 10 shares, he spent 10 x $40 = $400. He sold the shares for $36 each, so he earned 10 x $36 = $360. $360 $400 =? 2013 PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This 19

20 Calculating Profit and Loss The Home Depot Since Manuel bought 10 shares, he spent 10 x $40 = $400. He sold the shares for $36 each, so he earned 10 x $36 = $360. $360 $400 =? Manuel lost $ PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This 20

21 The Stock Market

22 Simulation: Become an Investor Choose your companies and spend $10,000 on their stock. Keep or sell? Find your profit PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This 22

23 Correct the Statement True or False? If false, correct the error PricewaterhouseCoopers LLP. All rights reserved. refers to the United States member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. This 23

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