What are Stocks? http://www.investopedia.com/video/play/what-are-stocks

1
What are Stocks?http//www.investopedia.com/video
/play/what-are-stocks

• Definition of a stock?
• What do stockholders have claim on?
• What assets are mentioned in the video?
• What major stock exchanges are mentioned in the
  video clip?

2
Introduction to Bonds http//www.investopedia.com
/video/play/understanding-bonds/

• A bond is a (1)... instrument issued by
  governments, corporations or other entities. It
  is a loan that (2)... make to the bond issuer.
  The (3)... of a bond (when its first issued) is
  the amount of money being loaned. Investors
  receive (4)... known as bond coupon. Bonds have
  different (5)... (e.g. 1year, 3 years or 30
  years) after which the bond issuer (6)... the
  loan to the investor.

3
BONDS
4
Bonds

• What?
• Who?
• Why?

5
What? Who? Why?

• borrowing/lending
• face value (principal)
• coupon (interest rate)
• bond issuers
• governments (government bonds)
• companies (corporate bonds)
• bondholders
• -individuals institutional investors
• -selling or holding bonds until maturity

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Debt Financing vs. Equity Financing MK, p.81
BONDS FOR INVESTORS FOR ISSUERS
ADVANTAGE
DISADVANTAGE
7
More about bonds (MK, p.81)

• Meaning of T-notes, T-bonds and gilts?
• Who are market makers?
• Bid vs. offer price?
• What is a spread?
• What is inversely related?
• What does the yield of a bond depend on?

8
The Financing of Corporate ActivityBased on
McConnell, C.R., Brue, S.L. (1996). Economics.
McGraw-Hill Inc.

• Text headings
• Corporate finance
• Stocks vs. Bonds
• Bond risks

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NOTES ON TEXT (PRE-TASK)

• Make notes based on p.37 (RB) and
• 3 requirements
• 1.Cover everything
• 2.Use as few words as possible
• 3. Make it clear for someone who did not read the
  text

10
The Financing of Corporate ActivityBased on
McConnell, C.R., Brue, S.L. (1996). Economics.
McGraw-Hill Inc.

• Features of well-organized writing
• Text headings
• Topic sentences
• Paragraphing
• Connectors

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CORPORATE FINANCE

• Full text Generally speaking, ...... three
  different ways... First, ..., Second, ..., For
  example, ...Third,...
• Notes
• THREE WAYS OF CORPORATE FINANCE
• 1.
• 2. .... (e.g. ...)
• 3.

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STOCKS VS. BONDS

• Full text In contrast, ..., For example, ...
  This means that...
  There
  are clearly important differences between...,
  First,... Second,..., On the one hand,..., On the
  other, ....
• Notes
• STOCKS vs. BONDS
• -ownership -lending
• -less risky 1.
• 2.

13
Bond risks

• Full text clear paragraphing topic sentences
• Notes
• CORPORATE BOND RISKS
• 1.
• 2.
• 3.

14
Introduction to Bonds (video) http//www.investope
dia.com/video/play/understanding-bonds

• Definition of bonds?
• Term used for the price of a bond on the primary
  market?
• Maturities mentioned?
• Coupons mentioned?
• Why do corporations/governments issue bonds?
• What is important to remember about bonds?

15
Stocks vs. Bonds (video ex.) http//www.investope
dia.com/video/play/stocks-versus-bonds

• Stocks and bonds are the two biggest 1 of most 2
  . Stocks usually provide a steady 3, and bonds
  tend to ensure a 4. . Bonds can be bought from
  5, and a careful selection of stocks will
  include 6 . A combination of stocks and bonds is
  good for all kinds of investors. For aggressive
  investors, bonds may 7... the risk of stocks and
  stabilize the 8 of the market, while stocks can
  help 9. investors 10 against the risk of
  inflation.