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Problem of the day….

- What is an IPO?

Problem of the day…

- The bank returns a check cashed by you because there was insufficient funds to cover the check. The check is called:

Novice Level

- Bought 100 Shares x $10.00 = $1,000
- Sold 100 Shares x $20.00 = $2,000
- $2,000 - $1,000 = $1,000
- You gained $1,000
- Assuming no commission was taken by the broker

Apprentice Level

- Bought 155 Shares x $12.00 = $1,860
- Sold 155 Shares x $23.00 = $3,565
- $3,565 - $1860 = $ 1,705
- You gained $1,705
- Assuming no commissions

Master Level

- Bought 2,200 shares x $20.00 = $44,000
- Sold 2,200 shares x $18.00 = $39,600
- $39,600 - $44,000 = - $4,400
- Loss of $4,400
- Assuming on commission

Grand Master

- Bought 200 shares x $20.76 = $4,152
- Sold 100 shares x $ 23.67 = $2,367
- Sold 100 shares x $19.21 = $1,921
- $2,367 + $1,921 - $4,152 = $136
- You gained $136
- Assuming no commission

Return on Investment

- Percentage increase or decrease
- New Number – Old Number / Old Number
- (N – O) / O
- Example:
- $60.00 original number
- $70.00 current number
- Calculate percentage increase or decrease:
- (70 – 60) /60 = 10/60 =
- 16.67% gain

Return on Investment

- Beginning Balance of $5,000 in brokerage account
- Don’t add or subtract from principal
- Current Balance of $4,900
- Calculate return on investment
- (4,900 – 5,000) / 5,000 = -100/5000
- = -2%

Calculate Return on Investment

Review:

Go back and calculate the return on investment from the four previous problems: (novice to grand master)

Answers

- Novice: (2,000 – 1,000)/ 1,000 = 1,000/ 1,000= 100%
- Apprentice: ( 3,565 – 1,860) / 1,860 = 1,705/1,860 = 91.67%
- Master: (39,600 – 44,000) / 44,000 =
- 4,400/44,000 = - 10 %

- Grand master: (2,367 +1,921 – 4,152)/ 4,152 =
- 3.28%

Closure/ Homework

Calculate the return on your investments in our stock market game

Assume no commissions right now