Posted: 4/7/2003 4:58:42 AM EDT
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OK, this is a long question, but I've been wondering this for a while. Can someone give me a simple explanation about the Stock Exchange and how it is important to our country? What are bonds and how do they work? And when did the stocks vs bond events being? How does bonds affect the stock exchange in detail. Also how do current events affect the stocks and business in the United States (War, depression, terrorism, company greed, etc.) And one final question, when Khalid Shaikh Mohammed was captured, how did this affect the market, the the numbers go up or down? (I'm guessing way up.) I know nothing about this topic but I'd like to learn a bit more about it. So any infomation you have would help greatly, thanks. :) |
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Can someone give me a simple explanation about the Stock Exchange and how it is important to our country? The Stock Exchange actually consists of three major exchanges, New York, American, & NASDAQ, & a lot of smaller regional exchanges in the U.S. There are also a stock exchanges in many foreign countries. I guess that the importance is a qualitative thing & everyone will have a different opinion. IMO they are important because they allow us all to own stocks & they provide liquidity. What are bonds and how do they work? Bonds are the debt instruments of companies or governments. A company might need $100 million to build a huge new plant & they don't have it in cash right now so they go out to the market with bonds & offer to pay you interest if you buy their bonds. The interest rates will vary based on many factors, but primarily the market and the rating of the company offering the bonds. Companies are rated based on their past repayment history & their expected future ability to repay these bonds. And when did the stocks vs bond events being? Sorry, I don't understand your question. If you mean "When did the markets begin?" the answer would be "a long time ago." The New York Stock Exchange began in the 1600's I think with informal trading right on Wall Street. How does bonds affect the stock exchange in detail. It's hard to answer this in detail because so many variables come into play in the markets. The general rule is that when bonds go up, that is, their net yield rises, that stocks go down & vice versa. It's not a one for one thing, only a rule of thumb, that is, a company might have both it's stock & it's bonds go up at the same time. Also how do current events affect the stocks and business in the United States (War, depression, terrorism, company greed, etc.) The market is driven by emotion many times, especially lately. When the war is perceived to be going good the market goes up disproportionately & when the war is perceived to be going badly the market goes down disproportionately. Same thing with any other factor. IMO stock prices should be driven by the company's expected value over the term that you expect to own their stock. And one final question, when Khalid Shaikh Mohammed was captured, how did this affect the market, the the numbers go up or down? (I'm guessing way up.) I would guess that you are right, but I'm not sure. You could probably research it on the net. First, what was the date of capture? Then, what was the next business day? If you are thinking about buying stock & bonds you need to do a lot more research than the answers to this post will provide. You can get a lot of info from your library as well as on the net. Buy the Wall Street Journal and the Investors Business Daily for a few days & read them, too. Sometimes you can get a free education from a stockbroker if you know someone that you can trust. Be careful, though. Their goal aren't usually the same as yours. They want to make money churning your account, that is by making commissions trading with your money. Your goal is to make money for yourself, not the broker. |