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Chapter 8: Problem 57

Each group should have a newspaper with current stock quotations. Choose nine stocks that group members think would make good investments. Imagine that you invest \(\$ 10,000\) in each of these nine investments. Check the value of your stock each day over the next five weeks and then sell the nine stocks after five weeks. What is the group's profit or loss over the five-week period? Compare this figure with the profit or loss of other groups in your class for this activity.

Short Answer

Expert verified
The exact profit or loss can't be predetermined as it depends on the selected stocks and their performance over the declared period. By following the above steps, the group can calculate the profit or loss at the end of the five weeks.

Step by step solution

01

Choose the Stocks

Begin with selecting nine stocks. There are no specific guidelines for this selection, but it is mostly a speculative decision.
02

Record Initial Values

Once you have selected your nine stocks, record the cost per share of each stock. You should calculate the number of shares you can buy with your $10,000 investment in each.
03

Track stock value

Keep track of the stock values daily for the next five weeks. You will better understand the volatility and performance of your chosen stocks.
04

Sell stocks

At the end of the five weeks, 'sell' the stocks. To simulate this, determine the current cost per share of each stock, and calculate the total value of your shares in each.
05

Calculate Profit or Loss

Calculate the profit or loss by subtracting the initial investment ($90,000) from the total amount after selling the stocks.
06

Compare results

Finally, compare your group's investment performance with the performance of other groups. Consider why certain stocks may have performed better or worse than others.

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