Blog #5. Title of blog: "Opportunity Costs". In your own words, explain what economists mean when they talk about "Opportunity Costs". What are opportunity costs? Give some examples. And give some examples from your own life. How do, or how will, opportunity costs affect you.Use these links for help. #1. - #2.
Opportunity cost is when one gives up the next best choice when one has to make a decision about what to do. Some example of opportunity cost would be a person who sells stock for $10,000 denies himself or herself the opportunity to sell the stock for a higher price in the future, inheriting an opportunity cost equal to future price minus sale price. Another example would be "If a city decides to build a hospital on vacant land it owns, the opportunity cost is the value of the benefits forgone of the next best thing that might have been done with the land and construction funds instead. In building the hospital, the city has forgone the opportunity to build a sports center on that land, or a parking lot, or the ability to sell the land to reduce the city's debt, since those uses tend to be mutually exclusive. Also included in the opportunity cost would be what investments or purchases the private sector would have voluntarily made if it had not been taxed to build the hospital. The total opportunity costs of such an action can never be known with certainty, and are sometimes called "hidden costs" or "hidden losses" as what has been prevented from being produced cannot be seen or known. Even the possibility of inaction is a lost opportunity". Opportunity cost will definitely affect me, i can spend my money and go eat out with my friends instead of doing this i could be home making up all my work and cleaning my room.
Sunday, April 5, 2009
Friday, March 13, 2009
Compound Interest
Compound Interest and the "Rule of 72". Do a little research and explain the concepts of Compound Interest and the "Rule of 72". Write your explanation in Blog #4. Title of blog: "Compound Interest and the Rule of 72". What is it about compound interest that inspired Albert Einstein to say "The most powerful force in the universe is compound interest". Use a Compound Interest calculator to see just what happens to money when Compound Interest is applied.Links about Compound Interest.
"Compound interest is interest that is paid on both the principal and also on any interest from past years. It’s often used when someone reinvests any interest they gained back into the original investment. For example, if I got 15% interest on my $1000 investment, the first year and I reinvested the money back into the original investment, then in the second year, I would get 15% interest on $1000 and the $150 I reinvested. Over time, compound interest will make much more money than simple interest. The formula used to calculate compound interest is:
M = P( 1 + i )n
M is the final amount including the principal.
P is the principal amount.
i is the rate of interest per year.
n is the number of years invested.
Applying the Formula
Let's say that I have $1000.00 to invest for 3 years at rate of 5% compound interest.
M = 1000 (1 + 0.05)3 = $1157.62.
You can see that my $1000.00 is worth $1157.62."
http://math.about.com/od/formulas/a/compound.htm
"Compound interest is interest that is paid on both the principal and also on any interest from past years. It’s often used when someone reinvests any interest they gained back into the original investment. For example, if I got 15% interest on my $1000 investment, the first year and I reinvested the money back into the original investment, then in the second year, I would get 15% interest on $1000 and the $150 I reinvested. Over time, compound interest will make much more money than simple interest. The formula used to calculate compound interest is:
M = P( 1 + i )n
M is the final amount including the principal.
P is the principal amount.
i is the rate of interest per year.
n is the number of years invested.
Applying the Formula
Let's say that I have $1000.00 to invest for 3 years at rate of 5% compound interest.
M = 1000 (1 + 0.05)3 = $1157.62.
You can see that my $1000.00 is worth $1157.62."
http://math.about.com/od/formulas/a/compound.htm
Wednesday, March 11, 2009
My Recession Spending
Students will do a reading about America's consumption habits and the fact that we have outsourced much of our industry. Then students will work on Blog #3. Title of Blog: "My Recession Spending". Read this article about changing spending habits during the recession. Then explain how you will alter your own personal spending habits. What will you do differently during "The Great Recession".
During the great recession I wouldn't buy things that I wouldn't "need". I would buy things that I would need like grocery, clothes etc. I wouldn’t over indulge in things that I don’t really need things like The Banana Holder, The Auto-Adjusting Wrench, The Battery-Powered Spinning Bottle, The Fuzzy Toilet Seat Cover, The Paper Weight, The Mechanized Egg Cracker, The Baby Wipes Warmer, and The Leaf Blower. Some of these stuff are pretty useless and why would you need something to do something that you can do your self. This useless stuff that American consumers want are decreasing natural resources like energy, raw material, mineral deposits etc. I mean some of these products might be helpful for the handicapped but not everyone in America is handicapped. During the great recession, I would reuse, reduce and recycle. Try to not buy things that I need not want because some of the things we want aren’t very useful and or needed.
During the great recession I wouldn't buy things that I wouldn't "need". I would buy things that I would need like grocery, clothes etc. I wouldn’t over indulge in things that I don’t really need things like The Banana Holder, The Auto-Adjusting Wrench, The Battery-Powered Spinning Bottle, The Fuzzy Toilet Seat Cover, The Paper Weight, The Mechanized Egg Cracker, The Baby Wipes Warmer, and The Leaf Blower. Some of these stuff are pretty useless and why would you need something to do something that you can do your self. This useless stuff that American consumers want are decreasing natural resources like energy, raw material, mineral deposits etc. I mean some of these products might be helpful for the handicapped but not everyone in America is handicapped. During the great recession, I would reuse, reduce and recycle. Try to not buy things that I need not want because some of the things we want aren’t very useful and or needed.
Tuesday, February 24, 2009
My invesment strategy
Blog #2. Title of Blog: "My investment strategy". You will have two class periods to do some stock market/investment research. You also have to write a blog post explaining your investment strategy for the upcoming stock market contest. The contest begins Thursday. For your initial investment you will have to buy stocks from at least 5 different companies. Use the "Stock Research" link on the sidebar of this page.
For this upcoming stock market contest I plan on investing my money on big companies, little companies and other companies that are doing well and some not so well. I plan on investing my money on products people use everyday or something used everyday. That is affordable even for people who makes 16,ooo a year. I invested in the 99 cent stores because face some people can afford to go and but things from much higher class stores. Its just not possible or affordable for some people.
For this upcoming stock market contest I plan on investing my money on big companies, little companies and other companies that are doing well and some not so well. I plan on investing my money on products people use everyday or something used everyday. That is affordable even for people who makes 16,ooo a year. I invested in the 99 cent stores because face some people can afford to go and but things from much higher class stores. Its just not possible or affordable for some people.
Thursday, February 12, 2009
Intro. to the Stock Market
1. What exactly is a stock and why do companies sell stock in the first place?
A stock market is a private or public for the trading of company stock and derivatives of
company stock at an agreed price.
2. What is the difference between a public and a private company?
The difference between public and private company is that public can buy stocks from a public company.
3. What is the Dow Jones Industrial Average?
The Dow Jones Industiral Average is the average index of the US stock market.
4. What is a blue chip stock?
A "blue chip" is the nickname for a stock that is thought to be safe, in excellent financial shape and firmly entrenched as a leader in its field.
5. What is the New York Stock Exchange and the NASDAQ?
New York Stock Exchange is a stock exchange based in New York City, New York and NASDAQ is NASDAQ is an American stock exchange. It is the largest electronic screen-based equity securities trading market in the United States.
6. What is a mutual fund and how do they operate?
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis.
7. What are some of the biggest companies on the stock market, what is the total value of their stock?
PetroChina-$546.14 billion
Lehman Brothers Holdings - 691.06 billions.
General Electric-$$330.93 billion
Washington Mutual - 327.91 billions.
ExxonMobil-$465.51 billion
General Electric-$$330.93 billion
and many more
8. What is the PE ratio of a stock?
PE ratio = Price per share / Annual earnings per share.
9. What is a stock dividend?
Dividend is the payment that is made by a company to its shareholder.
A stock market is a private or public for the trading of company stock and derivatives of
company stock at an agreed price.
2. What is the difference between a public and a private company?
The difference between public and private company is that public can buy stocks from a public company.
3. What is the Dow Jones Industrial Average?
The Dow Jones Industiral Average is the average index of the US stock market.
4. What is a blue chip stock?
A "blue chip" is the nickname for a stock that is thought to be safe, in excellent financial shape and firmly entrenched as a leader in its field.
5. What is the New York Stock Exchange and the NASDAQ?
New York Stock Exchange is a stock exchange based in New York City, New York and NASDAQ is NASDAQ is an American stock exchange. It is the largest electronic screen-based equity securities trading market in the United States.
6. What is a mutual fund and how do they operate?
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis.
7. What are some of the biggest companies on the stock market, what is the total value of their stock?
PetroChina-$546.14 billion
Lehman Brothers Holdings - 691.06 billions.
General Electric-$$330.93 billion
Washington Mutual - 327.91 billions.
ExxonMobil-$465.51 billion
General Electric-$$330.93 billion
and many more
8. What is the PE ratio of a stock?
PE ratio = Price per share / Annual earnings per share.
9. What is a stock dividend?
Dividend is the payment that is made by a company to its shareholder.