Beyond the Sound Bites:
S&P Puts 'Negative' Outlook on U.S. AAA Credit Rating
http://www.youtube.com/watch?v=5rfyKbiOAMQ
April 18 (Bloomberg) -- Standard & Poor's put a "negative" outlook on the U.S. AAA credit rating, citing rising budget deficits and debt. The ratings firm said there is "a material risk that U.S. policy makers might not reach an agreement on how to address medium-and long-term budgetary challenges by 2013." Bloomberg's Hans Nichols, Michael McKee and Peter Cook talk about the report with Carol Massar on Bloomberg Television's "In the Loop." (Source: Bloomberg)
The Chapter 9 Test Make-up is today.
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
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.
Dinosaur, 1:24
Email (or hand in hard copy) to gmsmith@shanahan.org.
Tuesday HW
1. p. 286, #30-32
