Download Stock Market Activity

Name ______________________________________ Hour ________ Date ________________________
STOCK MARKET ACTIVITY
READ AND ANSWER THE FOLLOWING QUESTIONS USING THIS WEBSITE…
http://www.investopedia.com/university/stocks/stocks4.asp
1. What determines the price of a stock? Explain what would cause a stock price to go up and
down.
2. What is market capitalization?
2a. Use the following information to determine the company’s market capitalization.
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Revenue - $100,000
Profit - $50,000
Share Price - $5
Number of Shares – 50,000
Market Capitalization = ___________________
3. What factors can affect the price of stock? I’m looking specifically for the things that would
change the supply/demand which in turn would change the price of the stock. You need to
read the entire page to find this.
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4. Of all of the factors mentioned, what is the most important factor that determines a
company’s value?
5. What happens during ‘earnings season’? How do these announcements affect stock prices
(specifically explain when they cause stock prices to rise and fall).
6. Price/Earnings (P/E) Ratio is one (of many) ratios and variables that investors use to assess a
stock. Click on the link on the website and explain what is meant by the price/earnings ratio .
6a. What does a high P/E ratio indicate or mean?
6b. What does a low P/E ratio indicate or mean?
7. Choose one of your companies and answer the following…
Company Name
_____________________________
Market Capitalization ________________
P/E Ratio
________________
Now choose one of the competitors for your company. You may have to research this if you
don’t know, or you can look at their stock quote and typically find this information.
Company Name
_____________________________
Market Capitalization ________________
P/E Ratio
________________
8. COMPARE AND CONTRAST the market capitalization and P/E ratio for your company with
the competitor that you looked up using what you just learned about market capitalization
and P/E Ratios.
9. Look up your stocks and check your portfolio. Below, in a paragraph, summarize your
portfolio’s performance thus far.