IO - Stock Transactions Lesson
Stock Transactions
Introduction
Stocks can be the most profitable investment, especially short-term, but they also hold a high risk! There are many options and the value of the stock can fluctuate daily. Many times, investors work through a stockbroker who will help them make decisions about which stocks to buy and which to sell. The Stock Market Crash in 1929 led to the Great Depression in the 1930s. On October 29, 1929, or what has come to be known as Black Tuesday, thousands of people were witnessed racing to Wall Street discount brokerages and markets to sell their stocks. Prices plummeted throughout the day, eventually leading to a complete stock market crash. So, the stock market has a big effect on the economy and the pockets of its investors!
Calculating Gain and Loss Practice
Much of the math involved in calculating gain and loss is very similar to what you have learned in previous lessons. See if you can apply your knowledge and work through the following tutorial. There is a hint available for each question if you need help. View the full solution to check your answers!
Broker Fees Practice
A stockbroker is a person who offers advice to investors on which stocks to buy or sell. They can charge a flat fee per trade or a percentage of the money spent on the transaction. Shares must be purchased through a licensed stockbroker. There are discount brokers who still charge a fee but do not offer advice. Their fees are usually cheaper.
Again, see if you can apply your knowledge and work through the following tutorial. There is a hint available for each question if you need help. View the full solution to check your answers!
Stock Transactions Practice
Let's compare different investor scenarios. In the interactive below, there are two different investors. Determine the gross proceeds (before the broker fees), the net proceeds, and the percentage change. There are two different scenarios. Click on the arrow on the bottom right to move to the next scenario.
⭐️ Help Video:
If you found any of these problems challenging, here is a video that will go over some of the answers.
Please note: For the first example for Investors A and B: the Net Proceeds should = 1352.50, not 1452.50.
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