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Money · Ages 10+ · Set A
What is a stock?
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Remember: A stock is a slice of a company. Owners share its earnings, and the price moves with what people expect. Neither is promised.

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Sam cuts up Lemon Co.Sam's Lemon Co. sold lemonade all summer, and the line never ended, so Sam dreamed of a second stand. It would cost 120 pretend coins, but Sam's jar held only two. "What if other people owned a little of Lemon Co.?" Sam wondered. So Sam cut Lemon Co. into ten equal slices, each worth twenty coins. A slice of a company is called a share, or a stock. Sam sold six slices: Maya bought two, Nico bought one and Ana bought three. Sam kept four. The six slices filled the jar with 120 coins, and the second stand opened. People who own a company's slices are called shareholders. At the end of summer Lemon Co. had earned thirty coins. Thirty coins shared by ten slices is three coins a slice, so Maya got six, Nico three, Ana nine and Sam twelve. Sharing earnings with owners is called a payout. Then the townspeople expected Lemon Co. to do well, so a slice sold for twenty-four. Maya's two slices were worth forty-eight, though she had paid forty. She could sell a slice to Ana at a price they agreed on. The buyer is another person, and the company is not part of the swap. Next summer it rained, people expected less, and a slice dropped to sixteen. Maya's two slices were worth thirty-two, less than she paid. Nobody made a mistake, because a price follows what people expect.
1
What is a slice of a company called?
A bondA stock, or a shareCash
2
Maya, Nico and Ana bought the slices in the rings. In all they bought slices.
3
Each slice sold for 20 coins. Six slices filled Sam's jar with coins.
4
Look at the table. Ana's payout is coins.
5
Where do the payout coins come from?
The earnings of Lemon Co., shared among the slicesA bankThe other shareholders' pockets

Order, match and fix

6
Maya sells a slice to Ana. The company is part of that swap.
TrueFalse
7
Look at the bars. Maya owns 2 slices. At the busy price, how much are they worth?
40 coins44 coins48 coins
8
After the rain Maya's slices are worth 32, less than the 40 she paid. Did anyone make a mistake?
Yes, the company cheatedNo, a price follows what people expectYes, Maya should never have bought
9
Number what happened in Sam's story.
  • Sam cuts Lemon Co. into ten slices
  • Sam sells six slices to friends
  • Sam needs coins for a second stand
  • The company shares its earnings with the owners
10
Join each word to its meaning.
  1. 1stock
  2. 2shareholder
  3. 3payout
  4. 4price
  • Aa slice of a company
  • Bearnings shared with owners
  • Cmoves with what people expect
  • Da person who owns slices
11
Dev says: a stock is a loan the company must pay back. What is the mix-up?
A stock is a jar of coinsA stock is a recipeA stock is a slice of a company, not a loan
12
Circle everything a stock gives its owner.
A share of the earningsA promise of a gainA price that movesA loan the company must repay
13
The price rose from 20 to 24 coins a slice. Maya's two slices gained coins in worth.
14
Draw Lemon Co. cut into ten slices. Color Sam's four slices.
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