Slide 14A
Who Put the Wall in
Wall Street?
Lesson 14
Slide 14B
What Does That Mean?
Term
Definition
Wall Street
the New York City financial district where stock
exchanges, banks, and investment companies are
headquartered; a global symbol of commerce and
capitalism.
security
a tradable financial instrument which represents
financial value; a stock, bond, or note.
negotiable
freely transferable; tradable.
bonds
a form of debt that companies and governments issue
to borrow money from the public.
Slide 14C
What Does That Mean?
Term
Definition
Treasuries
notes and bonds issued by the U.S. Department of the Treasury.
stock exchange
a financial market where securities are bought and sold.
New York Stock
Exchange
NYSE; the world’s largest stock exchange, by volume and value.
NASDAQ
a global electronic exchange for buying and selling securities
primarily within the technology (IT) sector.
Slide 14D
What Does That Mean?
Term
Definition
Securities and Exchange
Commission
SEC; the U.S. government agency that regulates the
securities markets to protect investors.
dividend
a payment made by a corporation to shareholders as a
distribution of its profits.
coupon rate
The interest rate on a bond.
default
failure to make a payment when and as due.
ticker symbol
a combination of letters that identify a specific stock on an
exchange; also called stock symbol.
Slide 14E
Reminder
 Remember to visit
http://c21student.com/flashc
ards/
to access the online flashcards!
Slide 14F
Lesson 14 Objectives
 Compare debt and equity securities.
 Explain the origin of stock.
 Relate the history of Wall Street.
 List the five largest stock markets in the
world.
 Summarize the key responsibilities of the
U.S Securities and Exchange Commission.
Slide 14G
Buy, buy! Sell, sell!
What is Wall Street?
A. An iconic American street.
B. Home to DiCaprio’s “Wolf ”
C. The New York City financial district where stock
exchanges, many banks, and investment companies
are headquartered
D. All of the above
Slide 14H
A Security Is…
 tradable (negotiable) financial
instrument
 equity securities = shares in
corporation
 debt securities = notes and bonds
(basically IOUs)
Slide 14I
State and Municipal Bonds
 Used as an alternative to raising
taxes for public works
 Special bond district
 Global opportunities for investment
 All bonds are rated with letter grades
 Risk and return are associated
Slide 14J
Securities Exchanges
 Public forums for trading stock,
notes, and bonds
 Stocks first traded in Belgium as joint
stock companies designed spread the
risk of loss on an investment
 Wall Street is the site of NYSE
founded in 1792
Slide 14K
How a Company Sells Shares
Through a Stock Exchange
 IPO = Initial Public Offering
 Registers with the SEC
 Applies for membership with exchange
 Is assigned a ticker symbol
 Sells shares to public for resale (on and
on- not reverting to the corporation)
Slide 14L
World’s Biggest Stock
Exchanges
 NYSE
 NASDAQ
 Tokyo Stock Exchange (TSE)
 London Stock Exchange (LSE)
 Hong Kong Stock Exchange (HKSE)
Slide 14M
The Big Picture
Securities can be debt, which are notes and bonds, or equity,
which are shares of a corporation. An investor who holds
bonds or notes is entitled to interest and repayment. There are
two kinds of stock: common and preferred. Common stock
receives a dividend only at the vote of the board of directors.
A stock investor buys shares hoping the value of the stock will
rise over time. Governments issue bonds to borrow money
from the public. Treasuries are bonds, bills, and notes issue by
the U.S. Department of the Treasury. Securities are traded via
securities exchanges. The joint stock company is the
forerunner to the modern day corporation. There are many
stock exchanges around the world, but the NYSE, started by a
group of merchants and business owners in 1792, is the
largest.
Slide 14N
Ponder and Predict
 There are about 2800 companies listed on
the NYSE, and hundreds of thousands
more listed on other stock exchanges
around the world, such as the NASDAQ,
AMEX, Tokyo and London Stock
Exchanges. So many companies! How does
an investor decide which stock to buy?
How do they determine if a share of
stock is worth what it’s trading for?