Instructions
Read each section carefully and answer the questions to the best of your ability. This worksheet will introduce you to the basic concepts of stocks and shares across different subjects. Good luck!
English: The Language of the Market
The world of stocks has its own vocabulary. Understanding these terms is the first step to understanding how the market works.
Activity 1: Vocabulary Match-Up
Match the term on the left with the correct definition on the right by writing the correct letter in the blank.
- ____ Stock
- ____ Dividend
- ____ Bull Market
- ____ Initial Public Offering (IPO)
- ____ Bear Market
Definitions:
- A. A market where stock prices are generally falling.
- B. A sum of money paid regularly by a company to its shareholders out of its profits.
- C. A general term for a share of ownership in a company.
- D. A market where stock prices are generally rising.
- E. The very first time a private company sells its stock to the public.
Activity 2: Reading & Comprehension
Read the short passage below and answer the questions that follow.
When you buy a company's stock, you are buying a small piece of that company. This piece is called a share. Companies sell shares to raise money, also known as capital. They use this capital to grow their business—for example, by building new factories, conducting research, or expanding into new areas. People buy shares hoping the company will be successful. If the company's value increases, the price of their shares will also increase. Investors can then sell their shares for a profit. It's a way for the public to invest in and share in the success of a business.
- According to the text, why do companies sell shares of their stock?
- What does an investor hope will happen to the value of their shares after they buy them?
Math: The Numbers Game
At its core, stock trading involves numbers. Let's practice some basic calculations you might encounter.
Activity 1: Calculating Profit and Loss
Show your calculations for each problem.
- Imagine you buy 20 shares of "Creative Tech Inc." at $50 per share.
- a. What is the total cost of your investment?
A month later, you sell all 20 shares for $65 per share.- b. How much money did you receive from the sale?
- c. What was your total profit?
- You buy 100 shares of "Global Motors" at $25 per share. Unfortunately, the price drops, and you decide to sell them all at $21 per share.
- a. Did you make a profit or a loss?
- b. How much was your profit or loss?
Activity 2: Dividends
Some companies share their profits directly with shareholders through payments called dividends.
- "Steady Foods Corp." pays an annual dividend of $2 per share. If you own 75 shares, how much will you receive in dividends for the year?
Social Studies: The Market and Society
The stock market doesn't exist in a vacuum. It is deeply connected to historical events and the overall health of the economy.
Activity 1: Cause and Effect
For each event below, predict whether the company's stock price would likely go up or down, and briefly explain why.
- Event: A popular video game company announces its new gaming console has a major defect and must be recalled.
- Effect on Stock Price (Up or Down?):
- Reason:
- Event: A renewable energy company is featured in a news story about its revolutionary new solar panel technology that is twice as efficient as anything else available.
- Effect on Stock Price (Up or Down?):
- Reason:
Activity 2: A Moment in History
Fill in the blanks using the words provided in the box below to learn about a major historical event involving the stock market.
The massive stock market crash of 1929 is a key event in U.S. history. The day the market plummeted, October 29, 1929, is famously known as ______________________. This event wiped out billions of dollars in ______________________ and was a primary catalyst for the worldwide economic crisis of the 1930s known as the ______________________.
Answer Key
English: The Language of the Market
Activity 1: Vocabulary Match-Up
- C Stock
- B Dividend
- D Bull Market
- E Initial Public Offering (IPO)
- A Bear Market
Activity 2: Reading & Comprehension
- Companies sell shares to raise money (capital) to grow their business.
- An investor hopes the value of their shares will increase so they can sell them for a profit.
Math: The Numbers Game
Activity 1: Calculating Profit and Loss
-
- a. 20 shares x $50/share = $1,000
- b. 20 shares x $65/share = $1,300
- c. $1,300 (sale) - $1,000 (cost) = $300 profit
-
- a. You made a loss.
- b. Cost: 100 shares x $25/share = $2,500. Sale: 100 shares x $21/share = $2,100.
$2,500 - $2,100 = $400 loss.
Activity 2: Dividends
- 75 shares x $2/share = $150
Social Studies: The Market and Society
Activity 1: Cause and Effect
-
- Effect on Stock Price (Up or Down?): Down
- Reason: (Sample Answer) A recall is expensive, hurts the company's reputation, and will lead to lower sales, making the company less valuable to investors.
-
- Effect on Stock Price (Up or Down?): Up
- Reason: (Sample Answer) This new technology will likely lead to huge sales and profits, making the company much more valuable. Investors will want to buy its stock.
Activity 2: A Moment in History
The massive stock market crash of 1929 is a key event in U.S. history. The day the market plummeted, October 29, 1929, is famously known as Black Tuesday. This event wiped out billions of dollars in investment and was a primary catalyst for the worldwide economic crisis of the 1930s known as the Great Depression.