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Transcript of Stock Market
Companies make money in two ways... Debt Financing Equity Financing Debt Financing is when a company borrows money when needed. Equity Financing is selling stocks. Company has to pay back the loan. (1, 2) Gets the money with fewer strings attached
No interest to pay and no requirement to pay back
If the company fails, the founders don't lose all of their money (1, 2) 3 main Stock Exchanges in the U.S. New York Stock Exchange (NYSE)
American Stock Exchange (AMEX)
National Association of Security Dealers (NASDAQ)
(1) All buying and selling of stocks are run through a Stock Exchange. (1) Without Stock Exchanges selling stock would be much more complex. All the buying and selling is done electronically to make it easier to keep track of stocks. (1) This also helps the investors watch how a stocks price reacts to news from the company, media reports, and national econmic news. (1) How this nonsense began... During the American Revolution, the coloniel Government needed money to fund its wartimes operations
They did this by selling bonds bonds are pieces of paper a person buys for a set price, knowing that after a certain amount of time they can trade their bond for profit (3) Along with bonds, the first of the nation's banks started to sell parts or shares of their own companies to people in order to raise money. Sold off part of the company to whoever wanted to buy it. (3) Wall Street bacme a major place for these transactions to happen
1792-24 men signed agreement that started NYSE
Agreed to sell shares or parts of companies between themselves and charge people fees to buy and sell for them (3) Found a place at 40 Wall Street in New York
As they grew they eventually moved into what is now the New York Stock Exchange (3) In the 1900's the Industrial Revolution caused a boom in Wall Street. Everyone Wanted to be a part of it (3)
The NYSE was no longer the only place to buy and sell stocks. People would trade outside on the curbs. (3) These "curb trades" eventually became the American Stock Exchange. (3) NASDAQ NASDAQ was developed in 1971 as the first electronic Stock Exchange in the world. (4) (cc) image by nuonsolarteam on Flickr It was created to increase the trading of Over the counter stocks (OTC)(4) Over the counter stocks refer to stocks that are traded through a dealer network, opposed to a centralized exchange. (5) In the 1990's NASDAQ was seen as competition for the NYSE
1994 NASDAQ beat NYSE in annual shares traded (4) In 1998 NASDAQ and AMEX merged
still operated as two separate exchanges but were better able to compete with the NYSE. (4) The Stock Market and People Occupations
Stock Broker- a person that buys and sells stocks at the stock market is called a stock broker. A stock broker needs people to buy stocks so they can get their payment, which is called a commission. The better salesperson the Stock Broker is the better living the Broker will make.
Trader- negotiates buyers and sellers and stock sales. They most often work for brokerage houses, investment companies, retirement funds and other finacial organizations (6, 2)
The Stock Market Increases Wealth among people who buy and sell stocks. There is not really a direct relation to the stock market and any ordinary person who doesn't have stocks. However, the Stock Market can contribute to things such as retirement. (2) Works Cited
Olson, Thomas. Personal interview. 17 Oct. 2011. (2)
Brain, Marshall. "HowStuffWorks "How Stocks and the Stock Market Work"." HowStuffWorks "Business & Money". N.p., n.d. Web. 19 Oct. 2011. <http://money.howstuffworks.com/personal-finance/financial-planning/stocks.htm>. (1)
"How Does the Stock Market Affect Our Daily lives?." Oracle Think Quest. N.p., n.d. Web. 17 Oct. 2011. <library.thinkquest.org/TQ0311549/how.htm>. (6)
"NASDAQ. NASDAQ - History, Profile, About, Companies." Free stock prices, quotes, stock charts, market news and streaming real-time stock quotes.. N.p., n.d. Web. 19 Oct. 2011. <http://www.advfn.com/StockExchanges/history/NASDAQ/NASDAQ.html>. (4)
"Over-The-Counter (OTC) Definition." Investopedia.com - Your Source For Investing Education. N.p., n.d. Web. 19 Oct. 2011. <http://www.investopedia.com/terms/o/otc.asp#axzz1bCHU3QNc>. (5)
"Stock Market Trader: Job Description and Information About a Career Trading Stocks." Research Schools, Online Courses, Degrees and Careers at Education Portal. N.p., n.d. Web. 19 Oct. 2011. <http://education-portal.com/articles/Stock_Market_Trader_Job_Description_and_Information_About_a_Career_Trading_Stocks.html>. (7)
"The Stock Market." Oracle Think Quest. N.p., n.d. Web. 17 Oct. 2011. <library.thinkquest.org/3088/stockmarket/introduction.html>.(3)
MLA formatting by BibMe.org.
People who invest in the Stock Market use money for things such as saving for their childs college education, travel, early retirement, buying houses and cars. (2, 6)