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Chapter 14 b - a particular stock index representing a set...

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Go to: http://finance.yahoo.com This Web site provides historical price movements for a stock that you specify. Type in the symbol for your stock then click on “Charts.” You can easily monitor the price of a stock you already own or may purchase in the future Common versus preferred stock Common stock: a certificate issued by a firm to raise funds that represents partial ownership in the firm Preferred stock: a certificate issued by a firm to raise funds that entitles share- holders to first priority to receive dividends Less risky than common stock Bonds Return from investing in bonds is in the form of coupon payments and price appreciation Mutual Funds Return from investing in mutual funds comes from coupon or dividend payments generated by the portfolio of the fund Publicly traded indexes: securities whose values move in tandem with
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Unformatted text preview: a particular stock index representing a set of stocks One of the most popular is the Standard & Poor’s Depository Receipt (S.P.D.R, also called Spider) • Real estate Buying a home or purchasing rental property or land Return from investing in real estate comes in the form of rent payments and selling the property for a higher price than paid for it • Investment Return and Risk • Measuring the return on your investment R = return Pt = price when sold Pt-1 = price when purchased • Example: If you pay $1,000 to make an investment and receive $1,100 when you sell the investment in one year, you earn a return of: R = Incorporating dividend or coupon payments Your return would be even higher if you also earned dividend or coupon payments D = dividends earned while you owned the investment...
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