ld select funds that meet their personal risk levels. For example, are students

Question

ld select funds that meet their personal risk levels. For example, are students risk takers, risk evaders, or indifferent to risk? Their choices of stocks are affected by their dispo- sition toward risk. The higher the student's level of risk tolerance, the more likely he or she will invest in aggressive funds versus income funds. Higher the risk higher potential for income. Lower risk higher chance for stability. Students may find the following table helpful in recording data about their stock investments. Divide $25,000 into three parts or budgets as indicated in Column 1 below. Stock Purchases Budget Name of Closing No. of Cost of Amt. of Cost of AmountCorporation Price Shares Stock Comm. Investment 1. 2. e In 2,0000 auebomt c 3 Name of the corporation: Write in the name of the company from the stock market. Closing price: Record the close price of the stock from the Wall Street Journal. This is the price students will pay per share for the stock. Number of shares: Record the number of shares of stock purchased. Take the budgeted amount and divide it by the close price. Students cannot buy a fraction of a share, therefore, drop all fractions and use only whole numbers. Then subtract four (4) shares from the whole number. This pays the commission Cost of stock: Multiply the close price by the number of shares. This is the amount of money the shares will cost. Amount of commission: Figure the commission. Multiply the cost of the stock by 1 percent (0.01). This is an approximate amount. Commission rates vary among brokers. Cost of the investment: Add the amount of commission to the cost of the stock to find the cost of the investment. Record Sheet for Recording Weekly Activity *Change from the Week Date of the Market Close Price Previous Week NA for this weekk 3 To find the weekly change, subtract the present week's close from the previous week's close;

Explanation / Answer

Stock Purchase Budget Amount Name of Corporation Closing Price No. Of Shares Cost of Stock Amt. Of Comm. (0.01) Cost of Investment $10,000.00 Apple, Inc. $171.05 58 $9,900.99 $99.01 $10,000.00 $10,000.00 Facebook, Inc. $175.10 57 $9,900.99 $99.01 $10,000.00 $5,000.00 Target Corp. $59.51 83 $4,950.50 $49.50 $5,000.00 Record Sheet of Weekly Activity Apple, Inc. Facebook, Inc. Target Corp. Week Date of the Market Close Price *Change from Previous Week Close Price *Change from Previous Week Close Price *Change from Previous Week 1 06-Nov-17 174.67 N.A. 178.46 N.A. 61.40 N.A. 2 13-Nov-17 170.15 -4.52 179.00 0.54 58.14 -3.26 3 20-Nov-17 174.97 4.82 182.78 3.78 55.88 -2.26 4 27-Nov-17 171.05 -3.92 175.10 -7.68 59.51 3.63 Stocks Sales 1 2 3 4 5 6 7 8 Corp. Name Shares Owned Close Price Gross Amount Received Amount of Commission Net Amount Received Amount Invested Net Gain(Loss) Apple, Inc. 58 $171.05 $9,920.90 $99.21 $9,821.69 $10,000.00 -$178.31 Facebook, Inc. 57 $175.10 $9,980.70 $99.81 $9,880.89 $10,000.00 -$119.11 Target Corp. 83 $59.51 $4,939.33 $49.39 $4,889.94 $5,000.00 -$110.06

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