The stock market is a vital component of the economy. As we will study later on in the semester, it is used as a measure of investor confidence in the economy. To better understand how the market works you are being asked to do the following homework assignment. This homework will require work for the rest of the semester and has several parts.

Part One – Pretend you have been given $500 to purchase stocks. Research stocks that interest you and decide on one or two stocks to purchase. These stocks must be traded on an American stock exchange. DO NOT choose a mutual fund (bundle of stocks) or a commodity (Oil, gold, etc.). Write a one to two-page paper (typed double-spaced, 12-point font, with normal margins) that explains why you chose these stocks. Just because you or your parents work for the company is not a sufficient justification for purchasing the stock. I want to see a thought-out explanation as to why you think this is a good company to invest in.
Part Two – For the next 10 weeks, track the current price of your stocks. Using the chart on the back of this paper, you should record the price of the stock. If at any time you choose to sell you stock, you should note on the chart how much you sold the stock for and why you sold the stock. You should present some justification for the sale. You will then need to purchase a new stock.

Part Three – You should graph your stock price information so that it is easy to see what happened to the stock. Graphs taken from the internet are not acceptable.

Part Four – Write an additional one to two-page paper analyzing why your stock price changed during the semester. You do not need to do a lot of research for this, use the knowledge you acquired this semester to speculate on why the stocks changed the way they did.

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