Bulls and Bears and Boats, Oh My!

Lesson 16

Slide 16A

What Does That Mean?

Term Definition

dollar volume dollar value of shares traded in a given period.

share volume number of shares traded.

stock market index

a method of measuring the performance of a section of the stock market or the stock market as a whole by averaging price changes of selected stocks.

blue chip stock stock issued by a well-established, large cap company with a reputation for quality, reliability, and profitably.

Slide 16B

What Does That Mean?

Term Definition

NASDAQ Stock Market Composite

an index that includes all of the stocks listed on the NASDAQ.

The Dow Jones Industrial Average

DJIA or Dow; an index which tracks 30 of the most influential American companies.

S&P 500 a market index that includes 500 of the most widely traded stocks of the NYSE and Nasdaq.

Slide 16C

What Does That Mean?

Slide 16D

Term Definition

Nikkei 225 the Nikkei; an index of 225 top-rated Japanese companies listed on the Tokyo Stock Exchange.

Hang Seng the Hang Seng or HSI; an index consisting of the 50 largest companies traded on the Hong Kong Stock Exchange.

bull market a period of long term rise in the stock market, or a particular sector or industry within it.

bear market a period of long term decline in the stock market, or a particular sector or industry within it.

Reminder Slide 16E

Remember to visit http://c21student.com/flashcards/

to access the online flashcards!

Lesson 16 Objectives

Explain the purpose of a stock index.

Interpret a stock index.

Name five major market indexes.

Compare a bear vs. bull market.

Tell about the goals and tools of the International Monetary Fund and World Bank.

Slide 16F

You know those standardized tests students (and teachers) endure every year? The data

provided by those tests is analyzed, scrutinized, and

agonized over by state education officials, district administrators, principals,

teachers, and parents. Why? What does the test data

reveal?

Slide 16G

Slide 16H

Let’s Interpret a Stock Index!

Slide 16I

Major Market Indexes

DJIA (The Dow)

S&P 500

NASDAQ

Nikkei

Hang Seng

Indexes provide data for… Comparing stocks country to country

Comparing stocks sector to sector

Comparing stocks industry to industry

Comparing large mid and small cap stocks

And any other combination

Slide 16J

The Big PictureSlide 16K

An index is a portfolio of stocks selected based on particular criteria. Indexes measure the performance of a segment of the stock market or the stock market as a whole by averaging price changes of the selected stocks. Indexes provide a snapshot of market conditions, insight into trends, and data for comparing like markets. Major market indexes are the DJIA, S&P 500, Nasdaq Composite, Nikkei, and Hang Seng. Bull and bear markets are when the market, or a sector of the market, trends up (bull) or down (bear) over an extended period of time. While stocks occasionally move in unison based on market mood, they generally move independent of one another. Being financially literate in the 21st century requires an understanding of the purpose and use of a market index, and familiarity with the major market indexes.

Ponder and Predict

The global economy is growing fast and it’s very competitive. Every nation wants an active and lucrative world trade. Can one country deny companies from another country access to their markets in order to protect or favor their own country’s products? Why would any country allow free and open access to their markets? What are the benefits?

Slide 16L