Chapter 3 – Rational Numbers
Math 9
Unit 3 Problem: Stock Market Analysis
Name: _______________________________________
Problem:
Block: ______
Your task is to assume the role of a financial advisor. You have just recently
acquired a new client who would like you to analyze their past investments
and suggest a possible course of action for the future. You task is to analyze
you client’s past stock trading purchases and then advise them on other stock
options. You must supply a comparison of similar stocks, evidence from past
market performance, and a mathematical analysis when suggesting another
stock that your client might want to consider.
Please use this as your final copy to hand in. Use your own paper to complete any rough
work and preliminary calculations.
Instructions
In order to conduct an analysis of different stocks, you are going to use the trading
information found on the Yahoo Finance website. The URL of the site we are using for this
project is http://ca.finance.yahoo.com/. You do not need to create a username to login.
To begin just type in the name of the company in the search box found at the top left of
the window. You then need to select the index on which this stock is being traded. Please
select the Nasdaq option. You will now see the information about your chosen stock. You
can see a graphical representation of the past performance of the stock by selecting the
graph located on the right side of the stock window. This chart can be customized to show
different timeframes and also to compare against different stocks.
Technology stock was a hot commodity in the early 2000s. Your client thought that they
would jump on the band wagon for purchasing technology stocks and invested $10,000 in
June of 2001. Knowing the number one rule of finance, “don’t put all of your eggs in one
basket”, your client invested a quarter of their money in low risk RRSPs, a third in savings
bonds and the remainder of their money in technology stocks. The money they reserved for
investing in technology stocks was split between the two technology giants Microsoft and
Apple. They allocated a third of the money towards shares in Apple and two thirds towards
shares of Microsoft. The market has changed dramatically since the stocks were purchased
in 2001 and your client has held on to both stocks waiting to realize significant gains.
Chapter 3 – Rational Numbers
Math 9
Part 1 – Your Client’s Portfolio
1. A) How much money did your client allocate to spend on the purchase of technology
stocks? Show your work.
B) How much of this money was put towards Microsoft shares? Show your work.
C) How much of this money was put towards Apple shares? Show your work.
2. Analyze both stocks since their inception (MAX timeframe):
Analysis of Microsoft Stock (MSFT)
A) What was the initial purchase price for one share of this stock in June of 2001?
___________
B) How many shares of this stock does your client own? Show your calculation. Round to
two decimal places.
C) After the initial purchase in June 2001, what was the lowest value of one share of
this stock? _______________ When did this occur? _________________
D) What was the value of your client’s Microsoft shares at this lowest point? Show your
work.
Chapter 3 – Rational Numbers
Math 9
E) By how much did your client’s Microsoft investment change from June 2001 to this
lowest point? Show your work and write your answer as a rational number.
F) What is the value of one share of this stock today? _____________
G) How has the value of one share of this stock changed from June 2001 to now? Show
your work and write your answer as a rational number.
H) How much money has your client gained or lost from June 2001 to now? Show your
work and write your answer as a rational number.
I)
What is the current value of your client’s initial investment into Microsoft? Show
your work.
Analysis of Apple Stock (AAPL)
J) What was the initial purchase price for one share of this stock in June of 2001?
___________
K) How many shares of this stock does your client own? Show your calculation. Round to
two decimal places.
L) After the initial purchase in June 2001, what was the lowest value of one share of
this stock? _______________ When did this occur? _________________
Chapter 3 – Rational Numbers
Math 9
M) What was the value of your client’s Apple shares at this lowest point? Show your
work.
N) By how much did your client’s Apple investment change from June 2001 to this
lowest point? Show your work and write your answer as a rational number.
O) What is the value of one share of this stock today? _____________
P) How has the value of one share of this stock changed from June 2001 to now? Show
your work and write your answer as a rational number.
Q) How much money has your client gained or lost from June 2001 to now? Show your
work and write your answer as a rational number.
R) What is the current value of your client’s initial investment into Apple? Show your
work.
3. Which company has outperformed the other since June 2001? Explain how you know.
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Chapter 3 – Rational Numbers
Math 9
Part 2 - Analyzing Your Choice of Stocks
Now that you have conducted an analysis that compares two similar stocks, select two
stocks of your choice. The two companies you choose to compare must make or provide a
similar product or service. Perform a thorough analysis of the companies’ stocks over the
most recent 5-year period and state which stock has outperformed the other. To help
with your analysis, determine what would happen to $2500 of stocks in each company
over the course of the 5-year period.
You must provide a neatly written or typed summary of your findings and attach to this
sheet. Use the following outline to guide your analysis:
Stock Prospective
Prepared for: (Client Name)
Prepared by: (Advisor’s name)
Company 1 Name:
Company 2 Name:
Stock Symbol Abbreviation:
Stock Symbol Abbreviation:
Graph of Stock 1 over the last 5 years:
Analysis of $2500 in Stock 1 over the last 5-year period:
Graph of Stock 2 over the last 5 years:
Analysis of $2500 in Stock 2 over the last 5-year period:
Comparison of the two stocks:
Part 3 - Reflect on your learning
What is the most important thing that you have learned about rational numbers?
Explain in your own words why rational numbers are so important.
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
Chapter 3 – Rational Numbers
Math 9
Evaluation - Unit 3 Problem: Stock Market Analysis
Name: _________________________________________________
Not Yet Adequate
Conceptual
Understanding
Procedural
Knowledge
Problem-Solving
Skills
Communication
Adequate
Block: _______
Proficient
Excellent
little understanding;
unable to explain or
demonstrate operations
with rational numbers
some understanding;
partially able to explain
and demonstrate
operations with rational
numbers
shows understanding:
able to appropriately
explain and demonstrate
operations with rational
numbers
shows depth of
understanding: able to
thoroughly explain and
demonstrate operations
with rational numbers
major errors or omissions
in calculating:
some errors or omissions
in calculating:
few errors or omissions in
calculating:
very few or no errors in
calculating:
– values in the Microsoft
analysis of Part 1
– values in the Microsoft
analysis of Part 1
– values in the Microsoft
analysis of Part 1
– values in the Microsoft
analysis of Part 1
– values in the Apple
analysis of Part 1
– values in the Apple
analysis of Part 1
– values in the Apple
analysis of Part 1
– values in the Apple
analysis of Part 1
– in Part 2, an
inappropriate method was
chosen to compare the
two stocks and state which
has outperformed the
other
– in Part 2, a somewhat
appropriate method was
chosen to compare the
two stocks and state which
has outperformed the
other
– in Part 2, an
appropriate method was
chosen to compare the
two stocks and state
which has outperformed
the other
– in Part 2, a very
appropriate method was
chosen to compare the
two stocks and state
which has outperformed
the other
– Part 1 work is not shown
– only some work is shown
in Part 1 or work is
difficult to follow
– Part 1 work is fairly
clearly shown
– Part 1 work is very
clearly shown
– Part 2 analysis and
explanation of which stock
has outperformed the
other is not clear and/or
difficult to follow
– Part 2 analysis and
explanation of which stock
has outperformed the
other is somewhat clear
but may be somewhat
difficult to follow
– Part 2 analysis and
explanation of which
stock has outperformed
the other is fairly clear
and easy to follow
– Part 2 analysis and
explanation of which
stock has outperformed
the other is very clear
and easy to follow
– Part 3 explanation is
missing
– Part 3 explanation is
lacking detail
– Part 3 explanation is
clear and detailed
– Part 3 explanation is
clear, detailed and
insightful