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General Mathematics (Stocks and Bonds)

1. The document discusses stocks and bonds, the two main types of securities. Stocks represent partial ownership in a company and allow the owner to share in potential dividends and capital gains, while bonds represent a loan made to a company or government in exchange for regular interest payments and return of principal. 2. The key difference between stocks and bonds is that stocks are an ownership stake in a company, while bonds are a loan made to a company or government. Stocks may provide higher returns but are more risky since their value can fluctuate, while bonds provide regular interest payments but generally have lower returns. 3. Investors must decide whether to invest in stocks, which have higher risk but potential for greater returns over

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108 views22 pages

General Mathematics (Stocks and Bonds)

1. The document discusses stocks and bonds, the two main types of securities. Stocks represent partial ownership in a company and allow the owner to share in potential dividends and capital gains, while bonds represent a loan made to a company or government in exchange for regular interest payments and return of principal. 2. The key difference between stocks and bonds is that stocks are an ownership stake in a company, while bonds are a loan made to a company or government. Stocks may provide higher returns but are more risky since their value can fluctuate, while bonds provide regular interest payments but generally have lower returns. 3. Investors must decide whether to invest in stocks, which have higher risk but potential for greater returns over

Uploaded by

Synta Flux
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Stocks and

Bonds
OWNER OR LENDER?
Minimum Health Standards

1. Wearing of Face Mask


2. Social Distancing
3. Frequent Washing of Hands
Objectives
The learner:
1. Illustrates stocks and bonds. M11GM-IIe-1
2. Distinguishes between stocks and bonds. M11GM-
IIe-2
Do you know what
the picture tells us?
The picture shows
the top 30
components of PSEI
(Philippine Stock
Exchange Index) in
2023.
Think Pair Share
What I Know What My What We
Partner Want to Learn
Knows
     
Stocks
It represents the part ownership of a corporation. This
entitles the stock owner to an equal ratio of the
corporation's assets and profits equal to how much stock
they own and how much capital gains and losses. Units of
stock are called "shares." The investor may not get his
original investment; dividends are optional and not an
obligation. Stocks may be purchased or sold at their current
market value price.
Definition of Terms in Relations to Stocks
Stocks - Part-ownership
Dividend – Company’s profit
Dividend per Share –the ratio of the dividends to the number of shares
Stock Market –a place where stocks are regulated, can be bought, and
sold.
Market Value – unit price or current price of a stock at which it can be
sold.
Par Value – the per-share amount, as stated on the company certificate. It
is determined by the company and remains stable over time.
Participants in A Stock Market
Investor is any person who puts or commits capital with the
expectation of receiving financial returns, relies on different
financial instruments to earn a significant return, and to
manage financial objectives like building retirement
savings, funding a college education, or merely
accumulating additional wealth over time.
Stock Exchange is an institution regulating the stock market and
facilitating the trading of shares by investors.
Broker is an individual act as an agent or firm that acts as an
intermediary between an investor and a securities
exchange. It is also known as the fund manager,
Listed Companies A company whose shares are listed by the
Stock Exchange as being available for buying and
selling under the rules and safeguards of the
Exchange.
Types of Stocks
1. Preferred Stock generally does not give an opportunity in voting.
The divided sharing is like fixed income, which is given priority if a
company goes bankrupt and is liquidated.
2. Common Stocks are given the right to participate in voting, such
as electing the company’s board of directors, several votes
equivalent to the number of shares. Enjoy the higher return of
investment over years of market activities and receive any dividends
paid out by the corporation.
BONDS
It is an adept instrument, a certificate that proves that a company or
corporation borrowed money from a certain group of individuals or
investors for a definite period at a fixed rate. Bonds are used by
companies, states, municipalities, and governments to finance
projects and operations. Owning a bond is just saving money from the
bank in which you will earn interest from the amount being
borrowed.
Participants in a Bond
Investor is any person who puts or commits capital with the
expectation of return or the lender or bondholder.
Debtholder or creditor is the borrower.
Bureau of the Treasury (BTr) acts as principal custodian of the
national government's financial assets. It helps formulate policies
on borrowing, investment, capital market development, managing
cash resources, collecting taxes, and controlling and servicing
public debt.
Definition of Terms in Relations to Bonds
Bond – Debt instrument or loan, amount of money on
the maturity date.
Coupon – periodic interest payment that the
bondholder receives during the time between purchase
date and maturity date. Usually received semi-annually.
Coupon Rate – the rate per coupon payment period.
Price of a Bond – the price of the bond at purchase
time.
Par Value or Face Value – the amount payable on the
maturity date.
T

Term of a Bond – fixed period (in Years) at which the bond is


redeemable as stated in the bond certificate, number of years
from the time of purchase to maturity date.
Fair Price of a Bond – the present value of all cash inflows to the
bondholder.
Skill Cultivation

What are the advantages/disadvantages of stocks? bonds?


Generalization

How can you distinguish stocks from bonds?


Application
If you are an investor which one will you
choose? Stocks or Bonds? Why?
Assessment
Directions: Read each statement or question below carefully and fill
in the blank(s) with the correct answer.
1. ___________________ Company’s profit
2. a place where stocks are regulated, can be bought, and sold
___________________,
3. It represents the part ownership of a corporation. which entitles
the owner of the stock to an equal ratio of the corporation's assets
and profits equal to how much stock they own and how much
capital gains and losses__________________
4. present value of all cash inflows to the bondholder.
___________________ .
5. _____________________ are used by companies, states,
municipalities, and governments to finance project and operations.
Owning a bond is just saving money from the bank in which you
will earn interest from the amount being borrowed
“It’s one small step for man, one
giant leap for mankind.”

- NEIL ARMSTRONG

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