Buying a Car

I, Tasnuva Ony would buy a new

Fed helps market go up

On Tuesday March 18, 2008 the DOW Jones made history after six years. This has been the biggest increase since then. The Dow Jones went up over 400 points due to the interest rate going down. The Federal Reserve gave money to the DOW Jones and cut off 75% of the taxes. This was the reason the DOW Jones went up extremely. People are going to borrow money now since the interest rate for the bank is less. This will lead to the rise of the United States economy.

Compound Interest and the Rule of 72

Compound Interest is paid on the original principal and on the accumulated past interest. When you borrow money from a bank, you pay interest. Interest is really a fee charged for borrowing the money, it is a percentage charged on the principle amount for a period of a year.

Example:Annually = P × (1 + r) = (annual compounding)
Quarterly = P (1 + r/4)⁴ = (quarterly compounding)
Monthly = P (1 + r/12)¹² = (monthly compounding)


Rule of 72 is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest.dividing 72 by the annul rate of return investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself.


192,122.92 over 47 years at 8% saving 1 dollar a day.

US Trade Deficit

*Explain what the US Trade Deficit is.
-->The US Trade Deficit is the difference between the cost of imports and the sales of exports.

*Why did it go down in December 2007?
-->In five years the US Trade Deficit went down because of the foreign imports.


*What does the value of the US dollar have to do with the trade deficit
falling?
Due to the fact that the value of the US dollar decreased.

*Why do you think that a large trade deficit is bad for the economy? In other
words: why is it bad to import more goods than you export?

This is bad for the economy because since we depend on the exporting goods. When we import we waste more money then export.

Opportunity Costs

*In your own words, explain what economists mean when they talk about opportunity costs. What are opportunity costs? Give some examples. And give some examples from your own life.

-->Opportunity cost is the loss of potential gain from the best alternative to any choice. Its the cost of pursuing one choice instead of another.

-->Economists give and take like doing exchanges in their investment. Example the economists will save 500 dollars to invest in stock instead of buying supplies for their offices.

-->Giving up time with your friends and to use that time to study for school.
-->Working to jobs to maintain a stable home. Your giving up your free time for the family.

My Investment Strategy

*Students will have two class periods to research their initial 5 stock picks and write a blog entry explaining their initial investment strategy. Why did you pick the stocks that you did?

-->My strategy of picking these stocks was because they are popular and well known companies. Also because they are big companies that invest a lot of money and they have a good record of their stock.I am not worried about loosing money because I will gain them back. So far my stocks are doing well. As of today I am in 4th rank but that could go down or up anytime. But I think most likely it wont because of their previous record. If I am really loosing money then I will sell them but it depends on the companies.

* What exactly is a stock and why do companies sell stock in the first place?
A share of ownership in a company. Owners of stock receive part of the company's profits-or bear some of its losses-up to the amount of money they put into the stock.
Companies sell stock to invest more money into their business so they can create new projects.

* What is the difference between a public and a private company?
Public company are owned by many investors while the shares of a private company are owned by relatively few shareholders.
Private companies don’t have to sell stocks

* What is the Dow Jones Industrial Average?
The Dow Jones Industrial Average is an index of thirty, blue chip stocks that are traded in the United States.

* What is a blue chip stock?
A blue chip stock is the stock of a well established company having stable earnings and no extensive liabilities.
Wal-Mart, Coca-Cola, Gillette, Berkshire Hathaway and Exxon-Mobile are examples of Blue Chip Stock.


* What is the New York Stock Exchange and the NASDAQ?
The New York Stock Exchange is the largest stock exchange in the World. It located in the New York City. This stock exchange carries American stocks of well established companies.
The National Association of Securities Dealers Automated Quotations is the largest stock exchange in New York. They trade through an automated network.


*What is a mutual fund?
Mutual Funds is where investors pool together money to improve their investments with stocks.


*What are some of the biggest companies on the stock market, how much is their stock?
Walmart, Citigroup, Exxon Mobil Crop and many more.


*What is the PE ratio of a stock?
PE ratio is a measure of the price paid for a share relative to the income or profit earned by the firm per share.


*What is a stock dividend?
A stock dividend is a share of stock that represents the share's portion of the company's profits, generally dispersed yearly.