1. Investing in Stocks
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2. What are stocks?
*When you purchase a stock (equity), you receive a piece of the
company.
*As one of the many owners of the company, you technically own a
piece of the company.
*A company raises money by issuing stock.
*The total value of stock held by the public is the company’s market
capitalization, or "market cap".
*A stock is considered a riskier investment than a bond (debt) and
thus requires a higher rate of return.
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4. Why Buy stocks?
*Historically, equities (Stocks) have provided superior long­term
returns compared to cash and debt investments.
Common share ownership in Canadian public companies offers
many potential benefits to investors, including:
* Capital appreciation
* Dividends
* Voting privileges
* Liquidity (shares can easily be bought or sold)
* Dividend tax credit and capital gains tax
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5. Long Term Investment
*Equities do typically fluctuate more in value.
*It’s important to take a long­term perspective when investing in equities.
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6. How can you buy them?
*The stock markets are places where buyers and sellers meet
to trade ­ in person or electronically.
*In Canada the Toronto Stock Exchange (TSX) is the largest
stock exchange. (Founded 1878)
*Smaller market cap stocks trade on the TSX Venture
Exchange.
*In the US, the New York Stock Exchange (NYSE) (Founded
1792)and NASDAQ are the most important exchanges, and
are in fact the largest in the world.
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7. Jeric wants to purchase 500 shares of Manitoba Telecom.
What will the shares cost him?
http://cxa.marketwatch.com/tsx/en/market/quote.aspx?symbol=mbt
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8. If Jeric's stock broker charges him a fee of 2% of the
order value, calculate Jeric's total cost.
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9. Calculate Laura's total profit/loss for the following
transactions:
Week 1: Laura purchases 100 shares of Astral Media
ACM.A for $26.75/share. Her broker charges her 3%
commission.
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10. Week 2: Laura sells her shares of Astral Media for
$31.25/share. Her broker charges her 3% commission.
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11. Assignment #3
Questions 1 ­ 4
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