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THE HIGH AND LOW OF IT
1.) If Maynard bought the stock at point A, when
could he have sold it and made a gain? Why?
2.) If Maynard bought the stock at point B, when
could he have sold it and made a gain? Why?
3.) If Maynard bought the stock at point A, when
could he have sold it without a gain or loss? Why?
4.) If Maynard bought the stock at point E, would
he have a gain or loss? Why?
5.) If Maynard bought the stock at point F, would
he have a gain or loss? Why?
6.) If Maynard took a loss when he sold the stock
at D, when would he have bought it?
7.) If Maynard made a gain when he sold the stock
at G, when would he have bought it?
CALCULATIONS FOR GAIN AND LOSS
The difference between the
TOTAL COST OF PURCHASE
and
TOTAL RECEIVED OF SALE
is
THE GAIN OR LOSS
In order to calculate the total cost of purchase and total
received, you need to know: the number of shares, the purchase price,
the sale price, and the broker's fee.
TOTAL COST OF PURCHASE=
(Number of shares X price of stock) + broker's fee
TOTAL RECEIVED OF SALE=
(Number of shares X price of stock) - broker's fee
Broker's Commission: 2% or .02 of purchase and
sale
Stockbrokers charge a fee for their services. This fee is called a
commission. Brokers earn a commission for each transaction (purchase
or sale) they execute. Fees vary, but in The Stock Market Game, it is
2%.
EXAMPLE - CALCULATION FOR
GAIN AND LOSS
The difference between the Total Cost of Purchase and
Total Received of Sale is the gain or loss.
For example:
Maynard Schweeb buys 100 shares of Amnex Inc. for $10.00 and sells them at
$15.00.
Total cost of purchase=
(Number of shares X price of stock) +
broker's fee
(100 X
$10.00)
+ (100 X $10 X .02)
1,000
+ (1,000 X .02)
1,000
+ $20 = $1,020.00
Total received of sale=
(Number of shares X price of stock) -
broker's fee
(100 X
$15.00)
- (100 X $15 X .02)
1,500
- $30= $1,470.00
GAIN OR LOSS? Total received - Total cost
If number is positive, it is a gain.
If number is negative, it is a loss.
For example: Total received of sale - total cost of
purchase
$1,470.00 - $1,020.00 = $450.00 GAIN
Try this Making and
Losing $$$$ activity.
Try this Gain or Loss
activity.
Percentage Change in Stock Price
Percentage Change=
The Amount of Change from the Original Price / The Original Price X 100
For Example:
Case 1
The change from 42 to 48 is 6.
Applying the formula:
6 / 42 X 100 = 14.3%
Case 2
The change from 3 to 5 is 2.
Applying the formula:
2 / 3 X 100 = 66.7%
Since the number increased, the percentage change is
considered a percentage increase.
Compare Case 1 and 2
Which one increased the most in dollars?
Which one increased the most in true value?
Case 3
What if the stock price went down from 42 to 35?
The change from 42 to 35 is 7.
7 / 42 X 100 =
16.7%
Since the number decreased, the percentage change is
considered a percentage decrease.
Percentage Change in Stock
Price Activity
Investment Group
Data Activity.
Tracking Gain/Loss Activity
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