FIN 100 WK 4 HW

Please note that this journal assignment is based on a pretend scenario and fictitious money. However,

the assignment is based on actual stock pr

icing in real time situations. Do not invest your personal

money for this assignment.

The capital markets and the ability to raise funds for corporate uses are essential to the US economic

systems.

For this assignment, imagine that you have $25,000 to inv

est in US companies. You are buying

used stock. The company got the money when it issued the stock originally. You will be buying it from an

existing owner.

You are investing, or buying the stock, because you believe the company will make money and pay you

a

dividend in cash. Each share of stock that you buy entitles you to any dividend declared and a vote at

the annual stockholders’ meeting.

The stock also allows you the ability to earn your money back by selling the stock. Of course, investing in

stocks i

s risky and there is the possibility that the stock you buy will be worth less when you want your

money back. The company is not obligated to give you any of your money back. You will only get your

money back if another investor wants to buy your stock.

Fo

r your first journal entry complete the following

:

1.

Indicate the companies you are investing in:

Select three (3) US companies that are publicly

traded.

Please use your knowledge and experience and pick, as many stocks as you’d like.

Lastly, make sure you

are practicing good diversification. Jim Cramer, Money Manger, on CNBC,

plays a game at the end of his show called “Am I Diversified.” Check out a short clip to get a

sense of industry diversification at

https://www.youtube.com/watch?v=f3lDxexupcE

.

1.

Sources of Information

: There are many ways to find such companies and the stock prices,

including the New York Stock Exchange at

http://www.nyse.com

,

Google Finance

at

http://google.com

, NASDAQ at

http://www.nasdaq.com

, and

http://f

inance.yahoo.com

.

2.

Indicate the amount you are investing in each company:

Decide how you will divide $25,000

across the three (3) companies; e.g. $10,000 in Company 1, $10,000 in Company 2, and $5,000

in Company 3. You decide the amount you are investing

in each company. You do not have to

provide any analysis to justify your decisions. You must only provide some reason for picking

that company. For example, you might invest in Ford because that company gets a lot of your

money and you hear that Ford is d

oing well, and will continue to do well.

3.

Indicate the number of shares you are buying, and the price of the shares you are buying for

each company:

Once you decide the companies and the amount for each company, determine

how many shares you can buy. If Com

pany 1 is selling for $42.16, then you may buy $10,000/

$42.16, or 237.19 shares. But you cannot buy a part of a share, so you decide to buy either 237

or 238. In this example you buy 237 shares, at $42.16 per share, investing $9,991.92. You won’t

be able

to buy exactly $10,000, or $5,000, or $25,000, but it will be relatively close.

Please note that this journal assignment is based on a pretend scenario and fictitious money. However,

the assignment is based on actual stock pricing in real time situations. Do not invest your personal

money for this assignment.

The capital markets and the ability to raise funds for corporate uses are essential to the US economic

systems. For this assignment, imagine that you have $25,000 to invest in US companies. You are buying

used stock. The company got the money when it issued the stock originally. You will be buying it from an

existing owner.

You are investing, or buying the stock, because you believe the company will make money and pay you a

dividend in cash. Each share of stock that you buy entitles you to any dividend declared and a vote at

the annual stockholders’ meeting.

The stock also allows you the ability to earn your money back by selling the stock. Of course, investing in

stocks is risky and there is the possibility that the stock you buy will be worth less when you want your

money back. The company is not obligated to give you any of your money back. You will only get your

money back if another investor wants to buy your stock.

For your first journal entry complete the following:

1. Indicate the companies you are investing in: Select three (3) US companies that are publicly

traded. Please use your knowledge and experience and pick, as many stocks as you’d like.

Lastly, make sure you are practicing good diversification. Jim Cramer, Money Manger, on CNBC,

plays a game at the end of his show called “Am I Diversified.” Check out a short clip to get a

sense of industry diversification athttps://www.youtube.com/watch?v=f3lDxexupcE.

1. Sources of Information: There are many ways to find such companies and the stock prices,

including the New York Stock Exchange at http://www.nyse.com, Google Finance

at http://google.com, NASDAQ at http://www.nasdaq.com, and http://finance.yahoo.com.

2. Indicate the amount you are investing in each company: Decide how you will divide $25,000

across the three (3) companies; e.g. $10,000 in Company 1, $10,000 in Company 2, and $5,000

in Company 3. You decide the amount you are investing in each company. You do not have to

provide any analysis to justify your decisions. You must only provide some reason for picking

that company. For example, you might invest in Ford because that company gets a lot of your

money and you hear that Ford is doing well, and will continue to do well.

3. Indicate the number of shares you are buying, and the price of the shares you are buying for

each company: Once you decide the companies and the amount for each company, determine

how many shares you can buy. If Company 1 is selling for $42.16, then you may buy $10,000/

$42.16, or 237.19 shares. But you cannot buy a part of a share, so you decide to buy either 237

or 238. In this example you buy 237 shares, at $42.16 per share, investing $9,991.92. You won’t

be able to buy exactly $10,000, or $5,000, or $25,000, but it will be relatively close.