Stock Market Game Directions - Indian Hills Community …

BUS 102: Introduction to Business

Instructions

Stock Market Game Directions

What the stock market is: Many firms are owned by individuals like you, who buy stock in their company. These people are called stockholders. Stockholders rely on company managers to manage the firm. Investors try to invest in companies that have the most potential to perform well in the future. Firms who continually improve will see a rise in stock prices, which means you have the potential of making money on your initial investment. Firms can also perform poorly, which will show in a decrease in stock prices, thus you could potentially lose some or all of your initial investment. Company values change daily.

Objective of the game: This game will introduce you to the world of investing and allow you to monitor how the values of stocks change over the course of the term. It will help you understand how the issues we will discuss in the text impact a firm's value.

Minimum Requirements: 1. Choose and keep stock in three companies throughout the term. You can divide your money among these companies any way you choose. 2. You must "trade" stock (sell one and then buy another new one) at least once. 3. Check your stocks at least weekly to determine the best time to buy and sell. Best principle: Buy when stock is low; sell when it's high to maximize your investment. 4. Complete the worksheet and summary report as described below.

Instructions: 1. Assume you have $25,000 to invest in the stock of three companies. You cannot invest more than $25,000. 2. Choose your companies a. The internet is your easiest source to find stock prices for your chosen company. b. Each company listed on the New York Stock Exchange has a symbol. Wal-Mart is WMT Google is GOOG c. The stock prices are listed by company symbol d. On the worksheet (in the appropriate gray cells), enter the following for each company you invest in: i. Name of company ii. Watch symbol

3. Track your investments a. is a good place to find these symbols and track stock prices b. You may also use other internet sites or the daily newspaper to track prices c. On the worksheet, for each of the companies you invested in, record the following in the appropriate (gray) cells in the Summary/return on investment section: i. Initial investment

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BUS 102: Introduction to Business

Instructions

ii. Number of shares purchased (you cannot purchase partial shares) d. Make your initial purchase by the end of the 2nd week of class. Track the changes in

your stock price weekly. On the worksheet, for each of the companies you invested in, record the following in the appropriate (gray) cells in the Weekly tracking of stock prices section:

i. Initial purchase (date in gray cell may be changed as appropriate) ii. Price per share, recorded weekly (date of weekly tracking may be changed as

appropriate) e. Additional columns are provided for the trades. If you sell Company A at the end of

week 4, you would use the amount of that sale to purchase into a new company. You would start tracking the new company at week 4, to show price of share at purchase, and track it weekly from week 5.

4. Reporting your return on investment (ROI) a. At the end of the time period (tracking of week 8), you will "sell" all your stock. b. Enter the price of stock from week 8 in the third gray cell in the Summary/return on investment section. Formulae have been inserted in the workbook to automatically calculate the gain or loss and the Return on investment.

5. Summary Report a. Format: i. Word document ii. Minimum of 1 page iii. Double spaced iv. 1" margins all around v. 12 pt. type, Times New Roman vi. Make sure your name is on it, either at the beginning or in the header. b. Content: Must include these items i. Summary of gains/losses: 1. Did your stock price change significantly during these weeks or did it remain relatively stable? 2. Did anything happen in the industry to cause a significant change in your company's stock value? 3. Did you make money or lose money ii. Rationale behind your trading decisions iii. Observations about the stock market 1. What did you learn from this experience? 2. What type of investor do you think you are: conservative; aggressive. 3. What types of stock would you look into if you become a "real" investor: technology, utilities; oil; small companies; large companies, etc.

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BUS 102: Introduction to Business c. Submit both files to the appropriate area when completed.

? Sherry Langfritz and Indian Hills Community College

Instructions

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