By Ana Gabriela García
Chapter 7: Stocks and Bonds
Bonds are used by both governments and businesses to raise money.
Stocks serve as investments for individuals, as through them a person can own a part of a company. Corporations issue millions of stocks, giving away tiny amounts of ownership, in order to raise cash.
The value of a stock varies over time, based on demand. For instance, if less people want to buy a stock, the price goes down.
Mutual Funds are an alternative to individual stocks. Mutual Fund Companies buy stock from other companies and then sell the shares of funds used to buy those stocks.
Stock Table Vocabulary
Above is an example of a newspaper’s stock table.
- 52-week High/Low: In the past year, it states which stock prices have been the lowest or the highest.
- Div: the lsdt dividend that the company paid shareholders
- PE- Price/Earnings ratio: you can get this by dividing the stock price with the per-share earnings of the last 12 months
- Last- the cost of one share at the end of the day before the newspaper was printed
- Change- the amount of fluctuation in the value of the stock, how much it increased or decreased in value that day
Governments and companies can also raise money by selling bonds. A bond acts like a loan, given by an investor to a corporation or government of their choosing. These are often referred to as “low-risk” investments. Many bonds are also tax-exempt.
A buyer can also earn interest at a set rate with bonds, since bonds have set payment dates and a set maturity date.
A bond’s face value can be the original amount a buyer has paid for it, most often it is the amount the buyer will receive at maturity.
Yet bonds are often sold on the open market before they mature, and therefore, even as their face value and interest remain the same, the value of the bond can increase or decreases depending on fluctuation demand and supply of the market. In other words, Buyer A can buy a bond with a face value of $1,000 and a 5 percent interest rate of ($50), but then sells it when the market is down for $500, Buyer B will get a better current yield.
Current Yield is the return on investment on a bond, which fluctuates. To calculate this, follow the formula:
Current Yield = (interest rate x face value) / price
Carla Muñoz buys a bond for $2,000 that had an original price of $1,500. The bond has an 8 percent interest rate. Her current yield is:
6% = (8% x $1,500)/ $2,000
Ricardo Velez then bought that same bond for $1,000. His current yield is:
12% = (8% x $1,500)/$1,000
For reporters, the cost of bonds issued by municipalities are news worthy. The formula to calculate this is:
Bond Cost (interest) = amount x rate x years
- Market Indexes
Instead of examining dozens of individual stock prices, investors can look at stock indexes for a snapchat of the overall market conditions. Stock indexes looks at certain groups of stocks and track their prices.
NASDAQ, S&P 500, Russell 2,000, and DOW JONES are examples of stock indexes.
Bonds also use indexes, like the J.P. Morgan Government Bond Index, to convey a snapshot of the overall market.
Dow Jones Industrial Average
The Dow Jones provides a view of the entire stock market. It represents the total value of a divisor divided by the respective shares of 30 select stocks.
The divisor is a figure that includes account stock dividends, splits, spin-offs, and other applicable corporate actions.
Or the National Association of Securities Dealers Automated Quotations is a quotation system that reports on the trading of bonds that are not listed on regular markets and of domestic stocks. NASDAQ is monitored by the Securities and Exchange Commission.
Chapter 8: Property Taxes
The greatest source of income for local governments are property taxes. Property taxes are very news worthy, since they pay for day-to-day expenses.
The property tax rate is determined by dividing the total amount of money the local government needs with the property owners in that tax district. The individual amount each property owner pays depends on the value of their respective property.
Taxing districts take homes, boats and other valuable assets into account. The formula for tax property varies depending on the state and local government.
These taxes are measured in units called mills, which are 1/10 of a cent ($0.001), and they are expressed in mills levied for each dollar of assessed valuation or property. One mil per dollar is 10 cents per $100 assessed valuation.
The price that a home would be sold at has no influence on its property tax. Property taxes only take into account the assessed value of the home, in other words, a percentage of market value.
Reappraisal is when real property values are updated to reflect the current market value of all the taxable properties within a taxing district. If a neighborhood improved in value, a reappraisal takes this into account.
Reappraisals can occur every few years, or never.
Property can also be taxed by many different governing bodies. For instance, some home owners have to pay county and city taxes, other might just have to pay city taxes.
Different types of property have different percentages with which to calculate their assessed value. A farm real estate can be assessed at 15 percent, while an industrial property is assessed at 35 percent.
Officials within local governments regulate the tax rate process.
The formula for finding mill levy is:
Mill levy = taxes to be collected by the governmental body / assessed valuation of all property in the taxing district
- Appraisal Value
- Use of property (i.e. business, home, etc.…)
- Square footage
- Number of stories
- Exterior wall type
- Year it was constructed (age)
- Quality of construction
- Amenities (bathrooms, porches, etc.…)
- Other characteristics of the property similar to those mentioned above ^
- Current market conditions (the sales in the immediate area over a period of years)
- A visual inspection by trained appraiser
- Assessed Value
Local policies in the end are what determined the assessed value of a property, to which a mill levy is always applied.
The formula for assessed value is:
assessed value = appraisal value x rate
Market Town assesses residential property at 30 percent of the appraisal value. A house at 201 Town Place is appraised at $135,000. What is the assessed value of the house?
$40,500 = .30 x $135,000
- Calculating Tax
The formula is:
Tax owed = tax rate x (assessed value of the property/$100)
If the rate is based on an amount per $1,000 of assessed value, the assessed value should be divided by $1,000 rather than $100.
Chapter 9: Directional Measurements
- Time, Rate & Distance
The basic formula for all time, rate and distance is the same, with elements of it switched around at times. The units of measurement (i.e. mph) should be the same for all three components of the equation.
Time = distance x rate
Rate = time x distance
Distance = rate x time
If time is given in minutes and you are working with mph, divide them by 60 to use hours instead.
Marnie is in a rural, mountainous part of North Carolina and she wants to leave and rejoin civilization at Greensboro. How far did she travel if she drove at an average speed of 20 mph for five hours.
100 miles = 20 mph x 5 hours
- Speed & Acceleration
Speed and Velocity are not the same measurement.
Speed = how fast an object is going
Velocity = indicates the direction of that object
Instantaneous Speed is the speed an object is going at that exact moment.
To find the average speed (or rate) of an object, use the formula:
average speed = distance x time
To find the acceleration of an object, use the formula:
acceleration = (ending velocity – starting velocity) / time
The formula for acceleration can be changed in order to find the ending velocity, starting velocity or time.
ending velocity = (acceleration x time) + starting velocity
- G Force
An acceleration measure in which one “g” represents the normal force of gravity in the Earth’s surface.
One measures the acceleration produced by Earth’s gravity at 9.8 meters or 32.2 feet per second per second. Two g’s equals 2 x 32.2.
The force needed to stop an object that is in motion. The formula used to find an object’s momentum is:
momentum = mass x velocity
Chapter 10: Area Measurements
Measurements can be explained in two ways.
Analogies: “The hotel was as big as twelve football stadiums”
: These fail when readers do not understand the comparisons being made
: Or when exact measurements are needed
Accurate Numbers (area, perimeter, circumference, etc.)
For square and rectangular shaped objects, always use the formula:
Perimeter = (2 x length) + (2 x 5) = 28 feet
Add the lengths of all sides to determine the size of the perimeter of an irregular shaped object.
- Area of squares and rectangles
The formula for both is the same.
Area = length x width
- Area of a triangle
Use the two shortest sides as ‘base’ and ‘height’
Area = .5base x height
- Square feet and Square yards
Square inches or square feet are used to measure small spaces, while square feet and square yards are used to measure larger areas (i.e. parking lots).
Fields are measured in acres and cities, states and counties in miles.
- 144 square inches = 1 square foot
- 9 square feet = 1 square yard
- 30 square yards = 1 square rod
- 160 square rods = 1 acre
- 1 acre = 43,650 square feet
- 640 acres = 1 square mile
- Radius, Circumference and Area of Circle
The distance from any edge to the center of a circle is the radius.
The distance around the radius, or the area of the circle, is its circumference.
Pi (π) is 3.14
The formula for finding the circumference is:
circumference = 2 π x radius
While the formula for finding the area is:
area = π x radius2
Allie wants to know the distance around the fountain in front of the Alamance building at Elon University. The distance from the end of the fountain to the middle if 6 feet.
2 π (or 6.28) x 6 feet = 37.68
Chapter 11: Volume Measurements
- Liquid Measurements
These apply to measurements in cooking recipes, and other fluids.
1 U.S. gallon = 4/5 imperial gallon
1 British or Canadian barrel = 36 imperial gallons
Crude Oil barrels in international markets contain 42 U.S. gallons or 35 imperial gallons.
- Rectangular Solids
volume = length x width x height
Cord is a measurement used when selling firewood.
1 cord = 128 cubic feet (when wood stacked neatly in line or row)
1 standard cord = a stack of wood 8 feet long, 4 feet wide and 4 feet high.
There are three different kinds of tons:
- Short ton = 2,000 pounds
- Long ton (or British ton) – 2,240 pounds
- Metric ton = 1,000 kilograms, or 2,204.62 pounds
Chapter 12: The Metric System
The metric ton is used by almost every other country except the United States, therefore it is an imperative measure for international commerce and science.
This system is based on multiples of 10.
The meter is the basic unit for length.
Mass is derived from the meter.
1 gram is the mass of one cubic centimeter of water at 0 degrees celsuis.
The Newton is the metric unit of force. When applied to a one-kilogram object, the Newton gives the object and acceleration of one meter per second per second.
A Newton can be used as a measure of weight.
1 kilogram weighs 9.8 Newtons on Earth.
In the metric system, a user can change from one unit to another by multiplying or dividing by 100, 1,000, and other multiples of 10.
Each unit is 10 times as large as the next smaller unit. Prefixes, added to the front of a unit’s name, create smaller or larger factors.
- Meter (length)
- Gram (mass)
- Liter (volume)
Micro (1 millionth) or 0.000001
Milli (1 thousandth) or 0.001
Centi (1 hundredth) or 0.01
Deka = 10
Hecto = 100
Kilo = 1,000
Mega = 1,000,000
Giga = 1,000,000,000
Tetra = 1,000,000,000,000
To convert American lengths to Metric:
Millimeters = 25.4 x inches
Centimeters = 2.5 x inches
Centimeters = 30 x feet
Meters = 0.3 x feet
Centimeters = 90 x yards
Meters = 0.9 x yards
Kilometers = 1.6 miles
To convert Metric lengths to American:
Inches = 0.04 x millimeters
Inches = 0.4 x centimeters
Inches = 3.9 x meters
Feet = 0.033 x centimeters
Feet = 3.3 x meters
Yards = 1.1 x meters
Miles = 0.62 x kilometers
Marie wants to find out the length, in feet, of the 30-meter swimming pool she swam at during her time abroad in Europe.
30 meters x 3.3 = 99 feet
Area, & Mass:
- All the names of units should start with lowercase when in the middle of a sentence, except for “degree Celsius.”
- Symbols for units are pluralized
- Names of units are plural when the numerical value that precedes it is greater than one.
- The symbols for units (i.e. mm) are never pluralized
There is a space between the number and the symbol to which it refers. For instance, 10 m, 24.8 kg