Rose Ann
Content
MODULE IN SECURITIES (Finance)
Rose Ann Gobris BBTE 3-2 Prof. Sheryl Morales
What this module is about
Nice meeting you, my dear student! Let¶s talk about business, how it began and how it is doing at present. Start your search by learning the concepts of securities, investments, stocks and bonds and how these affect the business world.
What you are expected to learn
This module is designed for you. At the end of the module, you are expected to have achieved the following: 1. Define Securities 2. Differentiate the types of Authorized Stock 3. Describe Bonds 4. Identify the Debentures
How to learn from this module You start exploring a new world ± the world of business. Who knows, someday you may become one of the successful entrepreneurs our country can be proud of. However, you have to: 1. Study the readings very well; 2. Perform the activities and work on the self-check exercises; 3. Perform the suggested tasks to reinforce learning and gain insights into specific topics; and 4. Answer the pretest and the posttest. Okay, are you ready now? Before proceeding, take the pretest first. This test is particularly prepared to determine your previous knowledge of the lessons you are about to study.
Pre Test
Multiple Choices Directions: Choose the best answer and encircle it. 1. It is an investment instruments, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity? a. b. c. d. Stock Debt Securities Allowance
2. The official definition of Securities which is any note, stock, treasury stock, bond«is from the Security Exchange under what act? a. b. c. d. 1934 1943 1987 1979
3. It is the unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture? a. b. c. d. Securities Dividends Debenture Allowance
4. It is an instrument that signifies an ownership position or the equity? a. b. c. d. Prepaid Stock Stockholm Expenses
5. Investment was define as the purchase of a financial product or other item of value with an expectation of favorable future returns in what area? a. b. c. d. Finance Business Shop Hotel
6. Investment was define as the purchase by a producer of a physical good, such as durable equipment or inventory, in the hope of improving future business in what area? a. Technology b. Industrial c. Business d. Politics 7. It is the total number of a company's shares that have been sold and are held by shareholders? a. b. c. d. Authorized Stock Issued Stock Unauthorized Stock Unissued stock
8. It is the maximum number of shares of stock that a company can issue?
a. b. c. d.
Authorized Stock Issued Stock Unauthorized Stock Unissued Stock
9. It is a stock authorized by a corporation's charter but not yet issued?
a. b. c. d.
Authorized Stock Issued Stock Unissued Stock Unauthorized Stock
10. One example of Bonds is? a. b. c. d. Unsecured Bonds Secured Bonds Bad Debt Good Debt
LESSON SECURITIES An investment instruments, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity. The official definition, from the Securities Exchange Act of 1934, is: "Any note, stock, treasury stock, bond, ,certificate of interest or participation in any profitsharing agreement or in any oil, gas, or other mineral royalty or lease, any collateral trust certificate, pre organization certificate or subscription, transferable share ,investment contract, voting-trust certificate, certificate of deposit, for a security, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities(including any interest therein or based on the value thereof), or a y put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or in general, any instrument commonly known as a 'security'; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrantor right to subscribe to or purchase, any of the foregoing; but shall not include currency or any note, draft, bill of exchange, or banker's acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited.
INVESTMENTS
1.
In finance, the purchase of a financial product or other item of value with an expectation of favorable future returns. In general terms, investment means the use money in the hope of making more money.
2.
In business, the purchase by a producer of a physical good, such as durable equipment or inventory, in the hope of improving future business.
STOCK An instrument that signifies an ownership position(called equity) in a corporation, and represents a claim on its proportional share in the corporation's assets and profits. Ownership in the company is determined by the number of shares a person owns divided by the total number of shares outstanding. For example, if a company has 1000 shares of stock outstanding and a person owns 50 of them, then he/she owns 5% of the company. Most stock also provides voting rights, which give shareholders a proportional vote in certain corporate decisions. Only a certain type of company called a corporation has stock; other types of companies such as sole proprietorships and limited partnerships do not issue stock also called equity or equity securities or corporate stock.
AUTHORIZED STOCK The maximum number of shares of stock that a company can issue is it's specified initially in the company's charter, but it can be changed with shareholder approval also called authorized shares or shares authorized. 1. Issued Stock-the total number of a company's shares that have been sold and are held by shareholders. Issued stock can be held both by insiders and by the general public. 2. Unissued Stock-stock authorized by a corporation's charter but not yet issued.
PREFERRED STOCK Capital stock which provides a specific dividend that is paid before any dividends are paid to common stockholders, and which takes precedence over common stock in the event of a liquidation. Like common stock, preferred stocks represent partial ownership in a company, although preferred stock shareholders do not enjoy any of the voting rights of common stockholders. Also unlike common stock, a preferred stock pays a fixed dividend that does not fluctuate, although the company does not have to pay this dividend if it lacks the financial ability to do so. The main benefit to owning preferred stock is that the investor has a greater claim on the company's assets than common stockholders. Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before common stockholders. In general, there are four different types of preferred stock: cumulative preferred, noncumulative, participating, and convertible also called preference shares.
BONDS Unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture. One example is an unsecured bond.
DEBENTURE Unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture. One example is an unsecured bond.
ACTIVITY
PICK-PACK-BOOM Mechanics: 1. Group the class into 8 groups 4 members each group. 2. The Teacher will assigned words per group a. Investments b. Authorized c. Stock d. Issued e. Unissued f. Common g. Bonds h. Debentures The first person in a group will shout Pick The Second will shout Pack Boom the third person And the Last person in a group will shout their assigned word Time Pressure must be execute properly The most alert group will win the game
3. 4. 5. 6. 7. 8.
Post Test
Multiple Choices Directions: Choose the best answer and encircle it. 11. It is an investment instruments, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity? e. f. g. h. Stock Debt Securities Allowance
12. The official definition of Securities which is any note, stock, treasury stock, bond«is from the Security Exchange under what act? e. f. g. h. 1934 1943 1987 1979
13. It is the unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture? e. f. g. h. Securities Dividends Debenture Allowance
14. It is an instrument that signifies an ownership position or the equity? e. f. g. h. Prepaid Stock Stockholm Expenses
15. Investment was define as the purchase of a financial product or other item of value with an expectation of favorable future returns in what area? e. Finance f. Business g. Shop
h. Hotel 16. Investment was define as the purchase by a producer of a physical good, such as durable equipment or inventory, in the hope of improving future business in what area? e. Technology f. Industrial g. Business h. Politics 17. It is the total number of a company's shares that have been sold and are held by shareholders? e. f. g. h. Authorized Stock Issued Stock Unauthorized Stock Unissued stock
18. It is the maximum number of shares of stock that a company can issue?
e. f. g. h.
Authorized Stock Issued Stock Unauthorized Stock Unissued Stock
19. It is a stock authorized by a corporation's charter but not yet issued?
e. f. g. h.
Authorized Stock Issued Stock Unissued Stock Unauthorized Stock
20. One example of Bonds is? e. f. g. h. Unsecured Bonds Secured Bonds Bad Debt Good Debt
Answer Key
1. B 2. A 3. C 4. B 5. A 6. C 7. B 8. A 9. C 10. B
Rose Ann Gobris BBTE 3-2 Prof. Sheryl Morales
What this module is about
Nice meeting you, my dear student! Let¶s talk about business, how it began and how it is doing at present. Start your search by learning the concepts of securities, investments, stocks and bonds and how these affect the business world.
What you are expected to learn
This module is designed for you. At the end of the module, you are expected to have achieved the following: 1. Define Securities 2. Differentiate the types of Authorized Stock 3. Describe Bonds 4. Identify the Debentures
How to learn from this module You start exploring a new world ± the world of business. Who knows, someday you may become one of the successful entrepreneurs our country can be proud of. However, you have to: 1. Study the readings very well; 2. Perform the activities and work on the self-check exercises; 3. Perform the suggested tasks to reinforce learning and gain insights into specific topics; and 4. Answer the pretest and the posttest. Okay, are you ready now? Before proceeding, take the pretest first. This test is particularly prepared to determine your previous knowledge of the lessons you are about to study.
Pre Test
Multiple Choices Directions: Choose the best answer and encircle it. 1. It is an investment instruments, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity? a. b. c. d. Stock Debt Securities Allowance
2. The official definition of Securities which is any note, stock, treasury stock, bond«is from the Security Exchange under what act? a. b. c. d. 1934 1943 1987 1979
3. It is the unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture? a. b. c. d. Securities Dividends Debenture Allowance
4. It is an instrument that signifies an ownership position or the equity? a. b. c. d. Prepaid Stock Stockholm Expenses
5. Investment was define as the purchase of a financial product or other item of value with an expectation of favorable future returns in what area? a. b. c. d. Finance Business Shop Hotel
6. Investment was define as the purchase by a producer of a physical good, such as durable equipment or inventory, in the hope of improving future business in what area? a. Technology b. Industrial c. Business d. Politics 7. It is the total number of a company's shares that have been sold and are held by shareholders? a. b. c. d. Authorized Stock Issued Stock Unauthorized Stock Unissued stock
8. It is the maximum number of shares of stock that a company can issue?
a. b. c. d.
Authorized Stock Issued Stock Unauthorized Stock Unissued Stock
9. It is a stock authorized by a corporation's charter but not yet issued?
a. b. c. d.
Authorized Stock Issued Stock Unissued Stock Unauthorized Stock
10. One example of Bonds is? a. b. c. d. Unsecured Bonds Secured Bonds Bad Debt Good Debt
LESSON SECURITIES An investment instruments, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity. The official definition, from the Securities Exchange Act of 1934, is: "Any note, stock, treasury stock, bond, ,certificate of interest or participation in any profitsharing agreement or in any oil, gas, or other mineral royalty or lease, any collateral trust certificate, pre organization certificate or subscription, transferable share ,investment contract, voting-trust certificate, certificate of deposit, for a security, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities(including any interest therein or based on the value thereof), or a y put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or in general, any instrument commonly known as a 'security'; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrantor right to subscribe to or purchase, any of the foregoing; but shall not include currency or any note, draft, bill of exchange, or banker's acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited.
INVESTMENTS
1.
In finance, the purchase of a financial product or other item of value with an expectation of favorable future returns. In general terms, investment means the use money in the hope of making more money.
2.
In business, the purchase by a producer of a physical good, such as durable equipment or inventory, in the hope of improving future business.
STOCK An instrument that signifies an ownership position(called equity) in a corporation, and represents a claim on its proportional share in the corporation's assets and profits. Ownership in the company is determined by the number of shares a person owns divided by the total number of shares outstanding. For example, if a company has 1000 shares of stock outstanding and a person owns 50 of them, then he/she owns 5% of the company. Most stock also provides voting rights, which give shareholders a proportional vote in certain corporate decisions. Only a certain type of company called a corporation has stock; other types of companies such as sole proprietorships and limited partnerships do not issue stock also called equity or equity securities or corporate stock.
AUTHORIZED STOCK The maximum number of shares of stock that a company can issue is it's specified initially in the company's charter, but it can be changed with shareholder approval also called authorized shares or shares authorized. 1. Issued Stock-the total number of a company's shares that have been sold and are held by shareholders. Issued stock can be held both by insiders and by the general public. 2. Unissued Stock-stock authorized by a corporation's charter but not yet issued.
PREFERRED STOCK Capital stock which provides a specific dividend that is paid before any dividends are paid to common stockholders, and which takes precedence over common stock in the event of a liquidation. Like common stock, preferred stocks represent partial ownership in a company, although preferred stock shareholders do not enjoy any of the voting rights of common stockholders. Also unlike common stock, a preferred stock pays a fixed dividend that does not fluctuate, although the company does not have to pay this dividend if it lacks the financial ability to do so. The main benefit to owning preferred stock is that the investor has a greater claim on the company's assets than common stockholders. Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before common stockholders. In general, there are four different types of preferred stock: cumulative preferred, noncumulative, participating, and convertible also called preference shares.
BONDS Unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture. One example is an unsecured bond.
DEBENTURE Unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture. One example is an unsecured bond.
ACTIVITY
PICK-PACK-BOOM Mechanics: 1. Group the class into 8 groups 4 members each group. 2. The Teacher will assigned words per group a. Investments b. Authorized c. Stock d. Issued e. Unissued f. Common g. Bonds h. Debentures The first person in a group will shout Pick The Second will shout Pack Boom the third person And the Last person in a group will shout their assigned word Time Pressure must be execute properly The most alert group will win the game
3. 4. 5. 6. 7. 8.
Post Test
Multiple Choices Directions: Choose the best answer and encircle it. 11. It is an investment instruments, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity? e. f. g. h. Stock Debt Securities Allowance
12. The official definition of Securities which is any note, stock, treasury stock, bond«is from the Security Exchange under what act? e. f. g. h. 1934 1943 1987 1979
13. It is the unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture? e. f. g. h. Securities Dividends Debenture Allowance
14. It is an instrument that signifies an ownership position or the equity? e. f. g. h. Prepaid Stock Stockholm Expenses
15. Investment was define as the purchase of a financial product or other item of value with an expectation of favorable future returns in what area? e. Finance f. Business g. Shop
h. Hotel 16. Investment was define as the purchase by a producer of a physical good, such as durable equipment or inventory, in the hope of improving future business in what area? e. Technology f. Industrial g. Business h. Politics 17. It is the total number of a company's shares that have been sold and are held by shareholders? e. f. g. h. Authorized Stock Issued Stock Unauthorized Stock Unissued stock
18. It is the maximum number of shares of stock that a company can issue?
e. f. g. h.
Authorized Stock Issued Stock Unauthorized Stock Unissued Stock
19. It is a stock authorized by a corporation's charter but not yet issued?
e. f. g. h.
Authorized Stock Issued Stock Unissued Stock Unauthorized Stock
20. One example of Bonds is? e. f. g. h. Unsecured Bonds Secured Bonds Bad Debt Good Debt
Answer Key
1. B 2. A 3. C 4. B 5. A 6. C 7. B 8. A 9. C 10. B
