Monday, April 18, 2011

Honors Business Economics: 18 April 2010

Prayer
Beyond the Sound Bites:

The Chapter 9 Test Make-up is today.

Google

http://www.youtube.com/watch?v=7TExxBRFF-0

The Quiz Prep Page is available.

For the Make-up Quiz, consider the material found in Chapter 9 Section 3:

minimum tax, VAT (Value-Added Tax), flat tax, federal tax reform, business taxes, profits, tax burden, personal income rate, depreciation, investment tax credit, and, capital gains.

Cf. http://shanawiki.wikispaces.com/Honors+Business+Economics+Chapter+9+Section+4+Quiz+Prep+Page+Spring+2011

Standard feature:

The electronic edition of the Philadelphia Inquirer is available. We have the Sunday edition, available on Mondays, in addition to the Tuesday through Friday editions on the other days.

Please follow the steps below:

URL: http://nie.philly.com
Click on the words "Access e-Inquirer" located on the gray toolbar underneath the green locker on the opening page.
Login:
Username: bshsinky@shanahan.org
Password: 10888

Chapter 11 Resources

Cf. http://glencoe.mcgraw-hill.com/sites/0078747643/student_view0/unit3/chapter11/chapter_overviews.html

Chapter 11: Financial Markets

Section 2 Financial Assets and Their Markets

current yield

In-class assignment, with a partner, answer the following.

Bond Investing: How to Find a Current Yield on a Bond, 1:49

How do we find a current yield on a bond?
What is the formula?
Where do you find this information?


The current yield on a bond is the yearly interest rate divided by the cost price of that bond. Find the current yield on a bond by calling the holder of the bond or checking the newspaper with help from a licensed financial planner in this free video on bonds and investing.

Expert: William Rae
Contact: www.hbwfl.com

junk bond

In-class assignment, with a partner, answer the following.

Stocks & Bonds: What Are Junk Bonds? 1:25

What is a junk bond?
What comes with high yield?
What may happen with junk bonds?


Junk bonds, or high yield bonds, are bonds that have low credit ratings, and therefore include an inherent risk. Be aware of a bond's credit rating before making an investment with help from a portfolio manager in this free video on personal finance and money management.

Expert: Gregory Bramwell-Smith
Bio: Gregory Bramwell-Smith is the relationship and portfolio manager at Bramwell-Smith Associates.

municipal bond

In-class assignment, with a partner, answer the following.

Bond Market: How Much Does a Municipal Bond Cost? 2:22

What is a municipal bond?
What do municipalities need?
What happens if a state or municipality defaults?
Today, do municipal bonds cost less or more? Why?
Why do you need to careful if investing in municipal bonds?


A municipal bond will have a lesser value if interest rates go up, and bond prices go down when a state, city or county has a deficit. Talk to a stockbroker about the advantages and disadvantages of municipal bonds with help from a personal asset manager in this video on the bond market and money management.

Expert: Roger Groh
Bio: Roger Groh is the founder of Groh Asset Management.

tax-exempt

In-class assignment, with a partner, answer the following.

Financial Planning & Investment Tips: Tax Exempt Money Market Fund, 1:09

What is a tax exempt money market fund?
What does it allow you to do?
When can you use it?


Tax exemption is a important benefit to money market funds. Discover more about tax exemptions with money market funds using tips from a registered financial consultant in this free video on financial planning.

Expert: Patrick Munro
Contact: www.northstarnavigator.com

savings bond

In-class assignment, with a partner, answer the following.

How much is your savings bond worth? 2:54

When should I cash in a bond?
What does mature mean?
How are savings bonds sold?
Do they pay interest regardless of maturity date?
How do you find out if a bond is still accruing interest?
What are your final options?

Cf. http://www.youtube.com/watch?v=86cCQUFuAEA

Just because your savings bonds have reached maturity doesn't mean they aren't paying interest; some still have very attractive yields.

beneficiary

In-class assignment, with a partner, answer the following.

Personal Finances & Money Management: How to Create a Beneficiary for a Certificate of Deposit, 1:16

Why do you want to name a beneficiary?
Who might this be?


Treasury note

In-class assignment, with a partner, answer the following.

Financial Planning: What Are Note Buyers? 1:40

What are note buyers?
What do they buy?
What are the two main reasons to do so?
What does the note buyer receive?


Treasury bond

In-class assignment, with a partner, answer the following.

Bond Market: How to Buy Government Bonds, 1:34

What does Uncle Sam want?
How does the government raise money?
Where do you find Treasury bonds?


Government bonds are issued by the U.S. government to balance the money that they've spent. Find out how to buy government bonds on the U.S. Treasury Web site with help from a personal asset manager in this free video on the bond market and money management.

Expert: Roger Groh
Bio: Roger Groh is the founder of Groh Asset Management.

Treasury bill

In-class assignment, with a partner, answer the following.

Finance & Investment Tips: What Is a Treasury Bill? 1:20

What is a Treasury Bill?
Where do you get these certificates?
Has its security come into question more recently?


A treasury bill is a way of financially investing in the U.S. government by lending them money, while the bill earns interest as it matures. Invest in treasury bills as a secure way to earn interest with ideas from a registered financial consultant in this free video on finance and investment.

Expert: Patrick Munro
Contact: www.northstarnavigator.com

Individual Retirement Account (IRA)

In-class assignment, with a partner, answer the following.

How to Time Your Roth IRA Conversion, 4:16

What is a new option in 2010?
How much should be converted?
What flaws are there in an immediate conversion?
What advantages are there in waiting?


Chris Leach, finance professor at the Leeds School of Business, is researching how investors can get the best value from a Roth conversion, which changes the tax status of a retirement account. Although conventional tax advice says you should convert right away, Leach and his co-author explore the circumstances where it might pay to wait.

capital market

money market

In-class assignment, with a partner, answer the following.

Personal Financial Planning Tips: How to Invest in a Money Market Account, 2:07

What three ways are there to invest? First, describe the simplest way.
What are the two other ways to invest?
What is the third way?


Ways to invest in a money-market account include through a bank, a mutual-fund company or through a discount brokerage. Earn interest on saved money with a money-market account with advice from a financial planner in free personal-finance video.

Expert: Julie Asti, CFP

primary market

secondary market

11.2 Reading Strategy

In-class assignment, with a partner, fill in the graphic.

Use the graphic organizer to identify and describe at least four financial assets.

Issues in the News Want More Interest? Meet Bond, Junk Bond

Bonds as Financial Assets

Bond Components

Bond Prices

Bond Yields

Bond Ratings

In-class assignment, with a partner, answer the following.

Reading Check

What factors determine a bond's value?

Financial Assets and Their Characteristics

Certificates of Deposit

Corporate Bonds

Municipal Bonds

Government Savings Bonds

Treasury Notes and Bonds

Treasury Bills

Individual Retirement Accounts

In-class assignment, with a partner, answer the following.

Reading Check

Analyzing

What features of a government bond most appeal to you?

Markets for Financial Assets

Capital Markets

Money Markets

Primary Markets

Secondary Markets

In-class assignment, with a partner, answer the following.

Reading Check

Contrasting

How are capital and money markets different? How do primary and secondary markets differ?

In-class assignment, with a partner, fill in the graphic.

11.2 Review

Use the graphic organizer to identify the characteristics of financial assets.

Case Study The NYSE

In-class assignment, with a partner, answer the following.

p. 304, #1 Why did the NYSE decide to expand into overseas markets?

p. 304, #2 What has happened to NYSE's share of market capitalization since the enactment of SarbOx (Sarbanes-Oxley Act)?

Then, answer the following while viewing the video.

How long has the NYSE been exclusively American?
Which country, U.S. or German, will own the majority of the NYSE?
Is New York, and American, still the dominant player in world financial markets?
Are derivatives a safe investment, or more risky?

The NYSE may not be New York anymore.

In finance, a derivative is a financial instrument whose value depends on other, more basic, underlying variables. Such variables can be the price of another financial instrument (the underlying asset, interest rates, volatilities, indices, etc. There are many kinds of derivatives, with the most common being swaps, futures, and options. Derivatives are a form of alternative investment.

Germany Buys New York Stock Exchange - Possible Dollar Collapse? 1:36


11.3 Investing in Equities and Options

Guide to Reading

equities

In-class assignment, with a partner, answer the following.

What are equities?
What do you call a person who considers equities?
What is a key factor?
How much, or how little, should you invest?

Finance & Investment Tips: What Are Equities? 1:14


Equities are a short term finance term given to stocks, bonds and mutual funds when an individual and financial investor has a stake in investment instruments. Understand equities and the risk factors involved with advice from a registered financial consultant in this video on finance and investment.

Expert: Patrick Munro

stockbroker

In-class assignment, with a partner, answer the following.

What is important when choosing a stockbroker?
What suggestions are available if you want a less expensive option?

Investment Advice: How to Choose a Stockbroker, 1:23


Choose a stockbroker by finding a brokerage firm that fits your financial goals and preferences. Use a traditional brokerage to get more direction and support or an online brokerage for cheaper trading. Find out more about finding the right stockbroker with advice from a financial consultant in this video on stockbrokers.

In-class assignment, with a partner, answer the following.

Efficient Market Hypothesis (EMH)

Trust Me, I'm an Economist, 2:54

Do most people most of the time choose the best option?
As a result, are there easily predictable bargains?
What do economists call this?
Can all experts be trusted, why or why not?


Tim Harford in the BBC 2 show, with a demonstration of why you should never trust the experts.

portfolio diversification

In-class assignment, with a partner, answer the following.

Faculty Focus: Don Chance speaks about portfolio diversification, 2:37

Why is portfolio diversification important?
What popular expression reflects this view?
What shouldn't you do?
What is the lesson?


Faculty Focus, a new video series from the E. J. Ourso College of Business, showcases research faculty in regular installments. In this episode, Dean Eli Jones interviews James C. Flores Endowed Chair of MBA Studies and Professor of Finance Don Chance about how investors should be diversifying their portfolios.

mutual fund

net asset value (NAV)

401(k) plan

stock exchange

securities exchange

over-the-counter market (OTC)

Dow Jones Industrial Average

Standard & Poor's 500 (S&P 500)

bull market

bear market

spot market

futures contract

option

call option

put option

11.3 Reading Strategy

In-class assignment, with a partner, fill in the graphic.

Use the graphic organizer to describe the different stock markets.

Figure 11.7 How Much Money Will You Have at Retirement?

Cf. http://glencoe.com/sites/common_assets/socialstudies/in_motion_08/epp/EPP_p308.swf

11.3 Review

In-class assignment, with a partner, fill in the graphic.

Use the graphic organizer to evaluate the risks and rewards of investments.

Figure 11.1 Overview of the Financial System

Cf. http://glencoe.com/sites/common_assets/socialstudies/in_motion_08/epp/EPP_p291.swf

Figure 11.2 The Power of Compound Interest

Cf. http://glencoe.com/sites/common_assets/socialstudies/in_motion_08/epp/EPP_p293.swf

Figure 11.7 How Much Money Will You Have at Retirement?

Chapter 10: Government Spending

Chapter 10 Resources

Chapter 10: Government Spending Multiple Choice Quiz

Chapter 10: Government Spending ePuzzles and Games Column

Chapter 10: Government Spending Vocabulary eFlashcards

Chapter 10: Government Spending In Motion The Federal Budget for Fiscal Year 2007

Chapter 10: Government Spending In Motion State and Local Expenditures

Chapters 8-11

Cf. http://glencoe.mcgraw-hill.com/sites/0078747643/student_view0/unit3/

Chapter 10 Resources

Self-Check Quiz, Crossword, Vocabulary

Cf. http://glencoe.mcgraw-hill.com/sites/0078747643/student_view0/unit3/chapter10/

Wisconsin Labor Protests - Noodles, 1:36


Spending, 6:25


Seinfeld Risk Management, 4:17

Cf. http://www.youtube.com/watch?v=laKprX-HP94

Finance Company Collector - A song protesting the current recession, 4:30


Josh Riddle and David Rufful are seniors at Dartmouth College.


Pension Tension Blues, 5:42

Lyrics: co-written by Susan Mangiero and Steven Zelin, Singing CPA.


Email (or hand in hard copy) to gmsmith@shanahan.org.

Monday HW
1. p. 286, #30-32