G. Mick Smith, PhD: Honors Business Economics: 20 April 2011

Tuesday, April 19, 2011

Honors Business Economics: 20 April 2011

Prayer
Beyond the Sound Bites (if time after Quiz):

The Chapter 10 Section 1 Quiz is today.

Clear your desk except for a pencil. Once everyone is quiet, and no talking during the Quiz, we can begin. Be sure to put your name on the Quiz and the Scantron. You may write on both the Quiz and the Scantron.

If you finish early, you may take out non-class materials; once everyone is finished, put away the non-class materials. Then, I will collect the Scantron first, and then I will collect the Quiz.

Be sure your name is on both the Scantron and the Quiz.

If your name is not on the Quiz it will not be returned.

Thousands showed up to restaurants nationwide to apply for jobs on the hamburger giant's first National Hiring Day, creating lines at some restaurants. The world's largest burger chain planned to use the day to add 50,000 new workers.

"McJob" even has a place in The Oxford English Dictionary, defined as "an unstimulating, low-paid job with few prospects."

Salaried managers for company-owned restaurants can make between about $32,000 and $50,000 annually.

The company said last year that about 75 percent of employees at company-owned restaurants are part-time, averaging 18 hours a week.

Three people were struck by a car and police are searching for the individual they say was responsible after a melee broke out at the McDonald's 'National Hiring Day' event in Cleveland.

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:

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URL: http://nie.philly.com
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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

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

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

Investment Basics: How Do Mutual Funds Work? 1:12

How do mutual funds work?
What do they charge?
Where do you find information about them?

net asset value (NAV)

401(k) plan

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

What will companies encourage their employees to do?
Do you pay taxes on these monies?
Can you take the money out at any time?

Finance & Investment Tips: 401k Plan Benefits, 1:25

Benefits of a 401k retirement savings plan include tax-free deductions, which could affect an individual's adjusted gross income, and receiving matching financial contributions from an employer. Understand the benefits of a 401k savings plan with tips from a registered financial consultant in this video on finance and investment.

Expert: Patrick Munro

stock exchange

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

When did the NYSE begin?
What famous person went there often?
What does the Exchange mirror?

Stock Market: History of the New York Stock Exchange, 2:26

The New York Stock Exchange began in 1792, with people exchanging certificates at a common meeting place for George Washington. Learn about the movement of the New York Stock Exchange over the years with help from a personal asset manager in this free video on investing in the stock market and money management.

Expert: Roger Groh

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