Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
TEXT FIGURE 19.4
Understanding Stock Quotations
(Text page 537)
PPT 19-40
Understanding Stock Quotations
(See complete PowerPoint slide notes on page 19.71.)
PPT 19-41
Top Financial News and
Research Sites
(See complete PowerPoint slide notes on page 19.72.)
PPT 19-42
Important Bond Questions
(See complete PowerPoint slide notes on page 19.72.)
3. CORPORATE BONDS are riskier.
B. BONDS ARE BOUGHT AND SOLD DAILY ON
1. You may sell your bond before maturity, but you
aren’t guaranteed to get the FACE VALUE of
you may be forced to sell your bond at a DIS-
COUNT, a price less than the face value.
value.
FALL, AND VICE VERSA.
3. If the company can’t pay off the bond, the inves-
Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
1. BOND PRICE is quoted as a percentage of
$1,000.
2. A 9% bond due in 2022 is referred to as “9s of
22.”
3. Figure 19.5 shows simple bond quotations.
Explain the investment opportunities in mutual funds and exchange-traded funds
(ETFs).
2. TYPES OF MUTUAL FUNDS
a. VERY CONSERVATIVE FUNDS invest only
vesting in a variety of funds.
Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
TEXT FIGURE 19.5
Understanding Bond Quotations
(Text page 539)
PPT 19-43
Understanding Bond Quotations
(See complete PowerPoint slide notes on page 19.72.)
PPT 19-44
Investing in Mutual Funds and
Exchange-Traded Funds
(See complete PowerPoint slide notes on page 19.73.)
PPT 19-45
What Mutual Funds Can Learn
from KaChing
(See complete PowerPoint slide notes on page 19.73.)
PPT 19-46
Percentage of Households Owning
Mutual Funds
(See complete PowerPoint slide notes on page 19.74.)
Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
tor SPREAD THE RISK of stock ownership.
Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
TEXT FIGURE 19.6
Mutual Fund Objectives
(Text page 540)
This text figure shows the wide range of investment catego-
ries available for mutual fund investments.
lecture link 19-6
THE DANGERS OF ETFS
ETFs have been a hot item recently. However, as their pop-
ularity grows an increasing number of risky ETFs are mislead-
ing investors. (See the complete lecture link on page 19.83 of
this manual.)
PPT 19-47
Varieties of ETFs
(See complete PowerPoint slide notes on page 19.74.)
TYPES within the fund family.
2. The quotation shows:
a. The fund’s NAME
price per share
c. The NET CHANGE IN THE NAV from the
direction (up or down) of the stock market over
Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
TEXT FIGURE 19.7
Understanding Mutual Fund
Quotations
(Text page 541)
PPT 19-48
Understanding Mutual Fund
Quotations
(See complete PowerPoint slide notes on page 19.75.)
TEXT FIGURE 19.8
Comparing Investments
(Text page 541)
PPT 19-49
Comparing Investments
(See complete PowerPoint slide notes on page 19.75.)
progress
assessment
(Text page 541)
PPT 19-50
Progress Assessment
(See complete PowerPoint slide notes on page 19.76.)
PPT 19-51
Key Stock Market Indicators
(See complete PowerPoint slide notes on page 19.76.)
critical thinking
exercise 19-3
DOW JONES COMPONENTS
This exercise asks students to visit the website for the Dow
Jones Indexes and research the historical components of the
index and its performance over time. (See complete exercise
on page 19.89 of this manual.)
19–50
stocks, and corporate mergers.
2. Today Dow Jones substitutes new stocks in the
Dow when it’s appropriate.
b. In 1999 the Dow added Home Depot and the
500 and the NASDAQ AVERAGE track a
5. It is important to stay abreast of the market to
evaluate investment opportunities.
1. The first major crash occurred on “BLACK
2. The stock market dropped 508 points on Octo-
3. On October 27, 1997, the Dow fell 554 points due
Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
TEXT FIGURE 19.9
The Original Dow and
the Current Dow
(Text page 542)
This text figure lists the 12 original Dow stocks and the 30
stocks currently included in the Dow Jones Industrial Average.
PPT 19-52
Market Turmoil
(See complete PowerPoint slide notes on page 19.77.)
lecture link 19-7
THE DAY THEY CALL “BLACK
TUESDAY”
The heady expansion of the 1920s came crashing to a halt
on October 29, 1929. (See the complete lecture link on page
19.84 in this manual.)
Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
5. From 2000 to 2002, both the S&P and NASDAQ
declined significantly in value.
6. Many analysts believe the 1987 crash was due
to PROGRAM TRADING, the process of giving
instructions to computers to automatically sell if
avoid potential losses.
7. As a result, U.S. exchanges created mecha-
number of points.
a. PROGRAM TRADING CURBS are put in ef-
their financial statements.
b. Investor trust was shattered by disclosures of
Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
PPT 19-53
Turmoil in the 2000s
(See complete PowerPoint slide notes on page 19.77.)
PPT 19-54
The Wall Street of Now
(See complete PowerPoint slide notes on page 19.77.)
PPT 19-55
The Ups and Downs of the Market
(See complete PowerPoint slide notes on page 19.78.)
PPT 19-56
Who’s at Fault for the Economic
Crisis?
(See complete PowerPoint slide notes on page 19.78.)
Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
FINANCIAL FRAUD in companies such as
9. The market surged upward again in the mid–
2000s.
a. The Dow set a record high in October 2007.
b. Prices for housing also improved, increasing
50% from 2000 to 2006.
CENTURY MARKET
Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
bonus case 19-3
THE NEXT GENERATION OF
BUBBLES
Rapid inflation led to the bursting of several financial bub-
bles. Now financial experts are trying to discover what could
burst next. (See the complete case, discussion questions, and
suggested answers beginning on page 19.95 of this manual.)
legal
briefcase
(Text page 545)
PPT 19-57
Cleaning Up
the Street
(See complete PowerPoint slide notes on page 19.79.)
1. Markets in the 21st century will probably experi-
ence heightened volatility.
rope, Asia, and South America.
2. The basic lessons are to DIVERSIFY your in-
19–57
19–58
PPT 19-1
Chapter Title
PPT 19-2
Learning Goals
PPT 19-3
Learning Goals
Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
19–59
PPT 19-4
Maria Bartiromo
PPT 19-5
Name That Company
Company: Berkshire Hathaway
PPT 19-6
The Basics of Securities Markets
Chapter 19 – Using Securities Markets for Financing and Investing Opportunities
19–60
PPT 19-7
Types of Securities Markets
PPT 19-8
Investment Bankers and
Institutional Investors
PPT 19-9
Stock Exchanges
1. In 2011, the NYSE Euronext agreed to be acquired
by Deutsche Borse AG for about $10 billion.
2. The trading floor is largely symbolic now as most
trading is done electronically.