sessions 3 and 4

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Santa Clara University *

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Finance

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Apr 3, 2024

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SIFMA FOUNDATION SMG ESSENTIALS WORKBOOK SESSION 3: BUILDING YOUR PORTFOLIO: ACTIVITY Name:________________________________ Date:___________ SMG ID:_________ 1. Review the short-term and long-term goals you shared in the Intro to Investing: Activity . Given what you’ve learned about risk tolerance so far, how would you rate your risk tolerance on reaching each goal? Would it be a “5” because you because you wou ld have time to earn back any money you may lose, or would it be “1” because you don’t have the time or resources to earn back any lost money? Or would it be somewhere in the middle? Explain. Low Risk Tolerance Medium Risk Tolerance High Risk Tolerance 1 2 3 4 5 Description Tolerance Level 1-5 - Explanation Long - Term Goal #1 Long - Term Goal #2 Increase my math grade to an A before the grading period ends There is not much risk with this risk since it is only the progress report grade. There would still be time to raise my grade. Buying a home 3 Since I'm still young, I would still have time to recover my money in case I made a bad purchase. The older I get however, the more risk there would be. 5

SIFMA FOUNDATION SMG ESSENTIALS WORKBOOK 2. Which of the companies you chose in the Intro to Companies & Stocks: Activity would help you achieve your investment goals? Are there companies you would add to that list? Explain. Description Company Name Explanation Short - Term Goals Long - Term Goals Save at least $1000 Target Target would help because if I worked there for a while, I would be able to earn some money. Paying for college Microsoft Similarly, Microsoft would help me with my goal because if I was employed there I would be able to pay some of my college fees.

SIFMA FOUNDATION SMG ESSENTIALS WORKBOOK SESSION 3: BUILDING YOUR PORTFOLIO: REFLECTION Name:________________________________ Date:___________ SMG ID:_________ Review your revised goals and investment plans and determine which of the companies chosen in the Intro to Companies & Stocks: Activity will be your first Stock Market Game trade. In the space below, write down your reasons for choosing the company. GLOSSARY Investment Strategy: A plan designed to help you achieve your investment goals which depends on factors including risk tolerance and values (sustainable investing). A company that will be our first Stock Market Game trade will be Starbucks. Fall is approaching, meaning Starbucks’ infamous pumpkin spice latte drink will return. Therefore, sales will increase, meaning stocks will increase. We will buy Starbucks stock prior to this predicted surge in sales and sell at a later time.

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SIFMA FOUNDATION SMG ESSENTIALS WORKBOOK SESSION 4: CONDUCTING RESEARCH Name:________________________________ Date:___________ SMG ID:_________ MINI-LESSON VIDEOS Conducting Research & Entering Stock Trades: http://tinyurl.com/smgessentialminilessons Reading a Stock Quote: A stock quote provides you with pricing information. This information helps you determine whether a stock is a good investment or not. Different financial news and research sites may organize their stock information differently but will provide essentially the same information. The example below is taken from a NYSE stock quote. Company Symbol The name of the company. The company’s stock/ticker symbol . Current Price Price Change Percent Price Change This is the current per share price of the stock. This is the difference between the stock’s current price and its last reported price. This is the difference in price expressed as a percentage. Prev Close Day’s Range The previous close is the stock’s closing price on the previous trading day. The highest price and lowest price of the stock so far today. Open 52wk Range The first trade of stock today is its opening price. The highest price and lowest price of the stock so far over a 52-week period. Bid Volume An offer made to buy this stock. The total number of shares traded so far today. Ask Avg Vol (3M) The price at which a seller wants to sell this company’s stock . The average of the total number of shares traded in the past three months.

SIFMA FOUNDATION SMG ESSENTIALS WORKBOOK 1 y Target Est Market Cap The median target price as predicted by analysts covering the stock. The total current market value of all outstanding shares of a company. Beta P/E Beta measures volatility. A number less than 1 means less volatility and a number greater than 1 means more volatility. A company’s closing price divided by its latest annual earnings per share. Next Earnings Date EPS The next time the company will report its Earnings. EPS stands for Earnings Per Share. It is a company’s profit or earnings divided equally among all the shares investors own. Div & Yield A dividend is a payment many companies make to its stockholders. Yield is the amount of cash that returns to stockholders.

SIFMA FOUNDATION SMG ESSENTIALS WORKBOOK SESSION 4: CONDUCTING RESEARCH: ACTIVITY Name:________________________________ Date:___________ SMG ID:_________ Enter the stock quote information for five of the companies you selected in the Intro to Companies & Stocks: Activity. You can also choose a new company to research. It can be a company from the SMG mini-lesson videos or one that you are interested in learning more about. Starbucks SBUX 92.22 68.39 - 117.80 0.86 32.38 Target TGT 161.62 1.02 137.16 - 268.98 17.13 Tesla TSLA 191.30 1.97 177.13 - 402.67 56.92

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SIFMA FOUNDATION SMG ESSENTIALS WORKBOOK Review the data you just gathered. What does a company’s stock quote tell you about the company? Are you still interested in investing in the company? Explain your thoughts using the space below. Microsoft MSFT 228.87 213.43 - 349.67 0.92 24.17 Nike NKE 93.75 1.12 82.22 - 177.75 26.85 A company's stock quote breaks down all the main components of a company's financial standing. It shows a lot of aspects that help one decide whether or not to invest. Considering all these five companies, I would still definitely invest in all of them because they have a stable financial status.

SIFMA FOUNDATION SMG ESSENTIALS WORKBOOK SESSION 4: CONDUCTING RESEARCH: REFLECTION Name:________________________________ Date:___________ SMG ID:_________ Review the companies you chose in the activity with your team. In addition to comparing the stock quote information for each co mpany, consider the company’s industry and public opinion about the company’s products and/or services. Decide which new company would make the best investment and purchase shares of it for your SMG portfolio. Which part of the company’s stock quote w as the most helpful in analyzing its investment potential? In the space below explain your reason why, your thought process, and investment strategy. GLOSSARY Previous Close is the stock’s closing price from the previous day. 52- Week Range is the highest price and the lowest price of the stock over a 52-week period (year). P/E Ratio (Price-to-Earnings Ratio) is a measure of a company’s stock price relative to its earnings. Beta measures volatility (rapid or unexpected change) as compared to the overall stock market. The most helpful component when deciding a company's investment potential would be the 52 week range. This range allows us to see where the company's stock mainly ranges from and whether it is doing well or not. If a company has a high range, we would most likely invest in that.