The first businesses in the U.S. were small and were usually owned by one person, or a few people. But as manufacturing increased rapidly during the late 1800's, the need arose for larger factories and more expensive machinery. A few people no longer could provide the money needed to run these growing businesses.
It therefore became necessary for large numbers of people to provide the money for big businesses. Such a business, owned by many people, is called a corporation. The owners are called stockholders. The stockholders own shares of stock in the corporation
People buy shares of stock hoping to someday sell their stock for more than they originally paid for it. A person wanting to buy stock contacts a broker, whose business it is to buy and sell stock for the public. The broker charges a commission, a fee averaging 1% of the value of the stock being bought or sold. The broker buys and sells through a stock exchange. The largest stock exchanges are on Wall Street in New York City, but there are stock exchanges in many major cities around the globe.
A list of corporations and their value per share can usually be found in the financial or business section of most newspapers. There are also many sites on the World Wide Web that provide stock information. We are going to pretend for a few weeks that you have $1,000 to invest in the stock market.
Needed Materials: Playing the Stock Market graphic organizer.
Choose five corporations from the list below. Write each corporation's name in a separate space in the "Buying" section of the graphic organizer.
Repeat this procedure for each of your other corporations.
Step 3: Decide how many shares of each corporation you are going to buy. Keep in mind the rules and your budget. Do the math to determine your total investment cost. Remember...your total investment cost must be over $900 but no more than $1,000!
You are done with this part of the activity. You will fill in the bottom part of the chart when you sell your stocks later in the year!
- Check your math.
- Make sure your name is in your paper!
- Hand it in.