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QUESTION

Stock Market Research Project

The problem: You have just inherited $100,000 from your millionaire great-uncle. Thestipulation is that you must invest it in the stock market until you turn twenty-one. First, youmust familiarize yourself with the stock market and then decide what some good investmentsmight be.

Your assignment:  You will complete this project in four separate parts.Your findings for each part should include and address each of the proposed questions. 

Part 1: Research: Learn the key terms and basic functionality of the stock market. 

  1. Research the stock market. What is a stock? What is a share? What is an exchange?Identify the various exchanges where stocks can be traded and discuss their similaritiesand differences (i.e. NYSE, NASDAQ). What types of companies are traded on each?

  2. Research stock market performance indicators, such as the DOW Jones and S&P 500.What do the indicators measure? How do they help predict the performance of themarket? What are their flaws?

  3. Research the sectors of the market. Identify three companies in each sector.

  4. Research companies in which you would invest. What characteristics do they have that

    make them good prospects? In other words, why might you choose to invest in each one

    of them?

  5. Compile the answers to these questions in a research report consisting of four to five

    well-developed paragraphs. This will be the first part of your Research Project.

    6. Make sure you give credit to the sources you use (MLA Citation Page)

Part 2: Invest: Choose 5â10 companies of your choice to invest your $100,000. Now applywhat you have learned about the stock market to the Stock Market Game; complete a six-weekstock market game simulation.  

  1. The following two websites(http://www.howthemarketworks.com and http://www.WallStreetSurvivor.com) havestock market simulation games and you will have the choice of which one you would liketo use. You will have to sign up for a free account in order to start this project. Makesure you visit both sites and pick which one you would like to work with. When selectingyour game, you will have the option to join a class or play individually. Select playindividually.

  2. Be sure to read the directions on how to play the game, and go to the help screen if youever have questions. Be sure to contact your teacher if you have any problems with thewebsite or the game.

  3. While playing the game, be sure to stay active. You will want to check your stockâsprogress DAILY and follow the news to get information on your company.

  4. Give a weekly report for as long as you play the game for your companies. For at leastfour of your companies, write a weekly summary on the business, earnings statements,or any news having an impact on your company's share prices. Create a table with areport summary for each company for each week during the six-week period.(do not actually take 6 weeks- it's fake, so just pretend it was 6 weeks).

  5. Include your reports and summaries in the second part of your Research Project.

Part 3: Draw Conclusions: After you complete the simulation, you will compile a report onyour achievements of the game.

  1. Did you have overall positive or negative earnings (list the total portfolio amount)?

  2. What was your most profitable stock? If you did not have any that made you money,

    which company lost the least?

  3. What company cost you the most money?

  4. How many transactions did you make throughout the game, and what was the dollar

    amount that the transactions cost you?

  5. Did the transactions have positive or negative externalities on the outcome of your

    game?

  6. What was the economyâs overall performance during these weeks?

  7. Write an overall analysis that discusses your stock investments as well as a general trend

    you might have noticed in the stock market as a whole. Your analysis should be three to

    four well-developed paragraphs. This will be the third part of your Research Project.

  8. Make sure you give credit to the sources you use. (See information later in this section

    for examples.)

THESE PARTS ARE COMBINED INTO ONE ASSIGNMENT 

Part 4: Make Inferences: Discuss what you have learned from this activity.

  1. Based on your findings, where do you think you might invest the money left to you by

    your great-uncle?

  2. Can you think of any other influences that might affect your decision on where to invest

    your money?

  3. Identify the things you learned about the economy by participating in this simulation.

  4. Did you like playing the game, and would you recommend it to others?

  5. Respond to these questions in three to four well-developed paragraphs. This will be the

    fourth, and final part of your Research Project.

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