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General Mathematics
Second Quarter
Module 8: Market Indices for
Stocks and Bonds

1
 Republic of the Philippines
Department of Education
REGION VII-CENTRAL VISAYAS
SCHOOLS DIVISION OF SIQUIJOR

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General Mathematics
Second Quarter
Module 8: Market Indices for
Stocks and Bonds

3
 INTRODUCTION

This module is written in the support of the K-12 Basic Education Program to ensure
attainment of standards expected of you as a learner.
This aims to equip you with essential knowledge on the different terms related to
Market Indices for Stocks and Bonds.
This includes:
Expected Learning Outcome – This lays out the learning outcome that you are expected to
have accomplished at the end of the module.
Pre-test – This determines your prior learning on the particular lesson you are about to take.
Discussion of the Lesson – This provides you the important knowledge, principles and
attitude that will help you meet the expected learning outcomes.
Learning Activities – These provide you with the application of the knowledge and principles
you had gained from the lesson and enable you to further enhance your skills as you carried
out prescribed tasks.
Post-test - This evaluates your overall understanding about the module.
With the different activities provided in this module, may you find this material
engaging and challenging as it develops your critical thinking and problem-solving skills.

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 What I Need to Know

At the end of this lesson, you will be able to:

 describes the different markets for stocks and bonds.
 analyze the different market indices for stocks and bonds.

What I Know

Let us find out how much you already know about the topics in this
module.
Directions: Choose the letter of the correct answer in every item. Write your answer on your
notebook.

1. Which of the following is true about index?

a. A typically large companies without regard for where they are domiciled or traded.
b. A sample of stocks that provide a glimpse at the broader market.
c. A financial market where participants can issue and trade stocks.
d. Represents partial ownership in a company.

2. Which does not belong in the group?

a. Benchmark Indices
b. Indices based on capitalization
c. Diversification
d. Indices based on different sectors/industries

3. What is a market index?

a. A place where investors go trade equity securities issued by corporations.
b. A financial market where participants can issue and trade stocks.
c. A place where individuals sell orders have been placed in the online platform and the
total number of shares these sellers wish to sell.

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 d. It is a hypothetical portfolio that derives its value from the values of its underlying
securities.

4. Which of the following does not belong in the group?

a. Benchmarks
b. Diversification
c. Segment- based Investment
d. Bid Price

5. What are the classifications of market indices?

a. Local and National
b. International and Global
c. Global and National
d. Provincial and National

6. How are you going to describe a 52-week low?

a. Gives the lowest price of stock in the market during the past 52 weeks.
b. Gives the lower price of stock in the market during the past 52 weeks.
c. Gives low price of stock in the market during the past 52 weeks.
d. Gives the lowest price of the stock in the market during the past 50 weeks.

7. What does stock in the stock table means?

a. a place where investors go trade
b. number of shares these sellers wish to sell
c. symbol the company is using for trading
d. referring to the index

8. How do you find net proceeds?

a.Net Proceeds = Market Price – Expenses
b.Net Proceeds = Market Price + Expenses
c.Net Proceeds = No. of shares x Selling Price
d.Net Proceeds = No. of shares - Selling Price

9. What is the formula to be used in finding market price?

a. Market Price = No. of shares x Selling Price
b. Market Price = Net Proceeds – Expenses
c. Market Price = Net Proceeds + Expenses
d. Market Price = No. of shares - Selling Price

Refer the table for items 10 – 12.

52 Week
52- 52- Stock DIV VOL CLOSE NETCHG
W WK (100s)
K LO
HI
75 65 CCC 2.5 1500 70 2

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 10. What was the highest price of stock for the 52 week for company CCC?
a. 65
b. 75
c. 1500
d. 70
11. What was the closing price the day before the last trading day?
a. 65
b. 75
c. 1500
d. 70
12.What was the dividend per share?
a. 2.5
b. 65
c. 2.8
d. 2

What’s In

Directions: Tell whether the given statement is True or False.

1. Bond is a form of equity financing or raising money by allowing investors to be part
owners of the company.

2. Bond is a debt financing or raising money by borrowing from investors.

3. Stocks are investors’ guaranteed interest payments and a return of their money at the
maturity date.

4. Stocks make the investors earn if the security prices increase, but they can also lose
money if the security prices decrease or worse, if the company goes bankrupt.

5. Bond is very appropriate for retires to invest or for those who need the money soon.

What’s New

Read a news clipping and take note of the familiar business terms that you encountered.

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 What Is
It

Market Index
 refers to a portfolio of securities that represent a particular section of
the stock markets.
 It is a hypothetical portfolio that derives its value from the values of its underlying
securities.
 An aggregate value produced by combining several stocks or other investment
vehicles together and expressing their total values against a base value from a
specific date.
An index is a sample of stocks that provide a glimpse at the broader market. When someone
says that market is up 100 points, they actually referring to the index.
Market Indices are classified as:
1. Global- A “world” or “global” stock market includes typically large companies
without regard for where they are domiciled or traded.
2. National – A “national” index represents the performance of the stock market of a
given nation – and reflects the investor sentiment on the state of the economy. The
most regularly quoted market indices are national indices composed of the stocks of
large & heavily traded companies listed on a nation’s largest stock exchanges, such as
the Sensex & Nifty.
What functions do Market Indices perform?
1. Benchmarks – Since investors cannot invest in an index directly, they must use price
movements as broad benchmarks of price movements of individual securities.
2. Diversification - Investors who hold a diversifies portfolio generally prefer index
investing over hit is because index investing enables them to optimize their returns
while being exposed to a minimal degree of risk.
3. Segment- based Investment - Using market indices is also a common method of
investing in emerging sectors with high growth potential. The sectors can also be
divided on a geographical basis.

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Stock Market
 is a place where investors go trade equity securities issued by corporations.
 It is also a financial market where participants can issue and trade stocks. Stocks
represents partial ownership in a company.
 A stock market index or just index is a number that measures the relative value of a
group of stocks. As the stocks in this group change value, the index also change value.
If an index goes up by 1% then that means the total value of the securities which
make up the index have gone up by 1% in value.
Stock Market Index is a measure of a portion of the stock market. It is composed of 30
companies carefully selected to represent the general movement of market prices. The up and
down movement in perfect change over time can indicate how the index is performing.
Stock Table 1
Index Val Chg %Chg
PSEi 7,523.93 -14.20 -0.19
Financials 4,037.83 6.58 0.16
Holding 6,513.37 2.42 0.0371
Firms
Industrial 11,741.55 125.08 1.07
Property 2,973.52 -9.85 -0.33
Services 1, 622.64 -16.27 -1.00
Mining and 11,914.73 28.91 0.24
Oil
Note: Values are hypothetical
 Val - value of the index
 Chg- change of the index value from the previous trading day
 %Chg - ratio of Chg to Value
 Buying or Selling Stocks
 Bid Size- the amount of individual buy orders and the total number of shares they
wish to buy
 Bid Price- the price these buyers are willing to pay for the stock
 Ask Price - how many individuals sell orders have been placed in the online platform and
the total number of shares these sellers wish to sell

Stock Table 2

52- 52- Stock HI LO DIV VOL CLOSE NETCHG

W WK (100s)
K LO
HI
94 44 AAA 60 35.5 .70 2050 57.29 0.10
88 25 BBB 45 32..7 .28 10700 45.70 -0.2

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  52 WK HI/LO – highest / lowest price of the stock in the past 52 weeks
 HI/LO – highest /lowest selling price of the stock in the last trading day
 STOCK – three-letter symbol the company is using for trading
 DIV – dividend per share last year
 VOL (100s)- number of shares (in hundreds) traded in the last trading days.
 CLOSE – closing price on the last trading
 NETCHNG – net change between the two last trading days (in the case of AAA, the
net change is 0.10. The closing price the day before the last trading day is php 57.29 –
php 0.10 = php 57.19)
The two tables are samples on how you are going to present information on the
movement of stocks.
Examples:
Consider the listing on stock and answer the questions that follow:
52 weeks
HI LO STOCK DIV YLD% VOL CLOSE NETCHG
(%)
120 105 GGG 3.5 2.8 4050 118.50 -0.50

Answer the following questions:

1. What was the lowest price of the stock for the last 52 weeks?
2. What was the dividend per share last year?
3. What was the annual percentage yield last year?
4. What was the closing price in the last trading day?
5. What was the closing price the day before the last trading day?
Answers
For Stock GGG
1. Lowest Price = php 105.00
2. Dividend per Share = php 3.50
3. YLD% = 2.8%
4. Closing Price = php 118.50
5. Closing Price (the day before the last day of trading) = php 118.50 + 50 = php 119.50

Buying or Selling Stocks

To buy or sell stocks, one may go to the PSE personally. However, most transactions
now a days are done by making a phone call to a registered broker or logging on to a
reputable online trading platform.
Bid Ask/Offer
Size Price Price Size
122 354,100 21.6000 21.8000 20,000 1
9 81,700 21.5500 21.9000 183,500 4

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 42 456,500 21.5000 22.1500 5,1000 1
2 12,500 21.4500 22.2500 11,800 4
9 14,200 21.400 22.3000 23,400 6

 Bid Size – the number of individual buy orders and the total number of shares they
wish to buy
 Bid Price – the price these buyers are willing to pay for the stock
 Ask Price – the price the sellers of the stock are willing to sell the stock
 Ask Size – how many individual sell orders have been placed in the online platform
and the total number of shares these sellers wish to sell

Example, the first row under Bid means that there is a total of 122 traders who wish to buy a
total of 354,100 shares at php 21.60 per share. The first row under
Formula: Net Proceeds = Market Price – Expenses
Market Price = No. of shares x Selling Price
Find the Net Proceeds of the stock table.
Name of Stocks No. of Shares Selling Price Expenses Net
Proceeds
Food Corporation 100 Php 1,040 Php 2,640 1.
Property Holdings 250 Php 500 Php 1,720 2.
Power Corporation 80 Php 1, 480 Php 1,880 3.
Transportation 300 Php 320 Php 2,240 4.
Corporation

1. Net Proceeds = (100 x 1040) – 2,640 = php 101, 360.00

2. Net Proceeds = (250 x 500) – 1, 720 = php 123, 280.00
3. Net Proceeds = (80 x 1, 480) – 1, 880 = php 116, 520.00
4. Net Proceeds = (300 x 320) – 2,240 =php 93,760.00

Bond Market is where the investors go to buy and sell debt securities issued by corporations
or governments. It is al so known as debt or credit market. It provides investors with a steady,
albeit nominal, source of regular income.

Who Takes Part in the Bond Market?

 Issuers: These are the entities that develop, register, and sell instruments on the bond
market, whether they’re corporations or different levels of government.
 Underwriters: They usually evaluate risks in the financial world. In the bond market,
an underwriter buys securities from the issuers and resells them for a profit.
 Participants: These entities buy and sell bonds and other related securities. By
buying bonds, the participants issue a loan for the length of the security and receives

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 interest in return. Once it matures, the face value of the bond is paid back to the
participant.
Government bonds are auctioned out to banks and other brokers and dealers every
Monday by the Bureau of the Treasury. Depending on their tenors, these bonds are also
called treasury bills (t-bills), treasury notes, (t-notes), or treasury bonds ( t-bonds) . The
resulting coupon rates and the total amount sold for these bonds are usually reported by news
agencies on the day right after the auction. Since these bond transactions involve large
amounts, these are usually not sold directly to individuals. These are sold to banks to banks,
insurance firms, and other major financial institutions. The banks may the re-sell these bonds
to the clients.
Though the coupon rate for bonds are fixed, bond prices fluctuate because they are
traded among investors in what is called secondary market. These prices are determined by
supply and demand the prevailing interest rates, as well as other market forces.
Investing in bond is relatively safer investment than investing in stocks, it is important
to note that there are still risks involved when investing in bonds. Before investing in bonds,
one must be aware not only of the financial condition of the issuer of the bond, but also the
prevailing market conditions.
Note: In order to find the total investment in bonds, you need to know the market price
of one bond and multiply by the number of bonds bought.
Example 1:
Ms. Johanna Vistan bought fifty php 1, 000 ACTS bonds at 103. What is her total
investment in ACTS bonds?
Solution:
Market Price of 1 bond: 1.03 x 1,000 = php 1,030 .00
Note: How did you get 1.03? You’ll get 1.03 by simply dividing 103 by (100) a
hundred.
(103 ÷ 100 = 1.03)
Total Investment = 1 030 x 50 = php 51,500.00
Interest = Par Value x Rate = Time
Example 2:
Mr. Santos owns 45 bonds with a par value of php 1,000 and pays 8.5% interest. What
annual income does Mr. Santos get from these bonds?
Solution:
Par Value of 45 bonds: 45 x 1,000 = php 45,000.00
Interest: php 45,000 x 0.085 x 1 = php 3, 825
The annual income for the year is php 3,825.00

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 Annual Income
Rate of Income =
Investment
Find the yield on php 1,000, 9% ACTS bond priced at 94 plus php 10 commission.
Annual Income: php 1,000 x 0.09 x 1 = php 90
Amount Invested: Market Price + Commission
(0.94 x 1,000) + 10
Php 940 +10 = php 950

Annual Income
Rate of Income =
Investment
90
=
950
= 47 %

What’s More

Directions: Consider the following listing on stocks on the table below that shows the 52
week data. Answer the questions that follow. Write your answer on your
notebook.

52 Week
52- 52- Stock HI LO DIV VOL CLOSE NETCHG
W WK (100s)
K LO
HI
94 44 AAA 60 35.5 .70 2050 57.29 0.10

1. What was the lowest price of the stock for the last 52 weeks?
2. What was the dividend per share last year?
3. What was the closing price in the last trading day?
4. What was the closing price the day before the last trading day?

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 What I Have Learned

I learned that:
 Market Index- refers to a portfolio of securities that represent a particular section of
the stock market.
 An index is a sample of stocks that provide a glimpse at the broader market. When
someone says that market is up 100 points, they actually referring to the index.
 Stock Market - is a place where investors go trade equity securities issued by
corporations.
 Stock Market Index - is a measure of a portion of the stock market.
 Val - value of the index
 Chg- change of the index value from the previous trading day
 %Chg - ratio of Chg to Value
 Bond Market- is where the investors go to buy and sell debt securities issued by
corporations or governments.
 Bid Size – the number of individual buy orders and the total number of shares they
wish to buy
 Bid Price – the price these buyers are willing to pay for the stock
 Ask Price – the price the sellers of the stock are willing to sell the stock
 Ask Size – how many individual sell orders have been placed in the online platform
and the total number of shares these sellers wish to sell
 Issuers: These are the entities that develop, register, and sell instruments on the bond
market, whether they’re corporations or different levels of government.
 Underwriters: They usually evaluate risks in the financial world. In the bond market,
an underwriter buys securities from the issuers and resells them for a profit.
 Participants: These entities buy and sell bonds and other related securities. By
buying bonds, the participants issue a loan for the length of the security and receives
interest in return. Once it matures, the face value of the bond is paid back to the
participant.
 Net Proceeds = Market Price – Expenses
 Market Price = No. of shares x Selling Price
 Interest = Par Value x Rate = Time
Annual Income
 Rate of Income =
Investment

What I Can Do

Directions: Find the total cost of the stock by completing the table. Write
your notebook.

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 No. of Shares Stocks Market Price Broker’s Total Cost
(php) Commission
98 Beiter Corp. 93.50 458.15 1.
450 Hoyst , Inc. 87.00 1,957.50 2.
2,000 Fivics Holding, Corp 103.00 10,300.00 3.
60 Stark Inc. 99.75 299.25 4.
250 Front Corp. 78.50 981.25 5.

Assessment

A. Find the market price of one php 1,000 bond of each quoted price. Write your answer
on your notebook.
1. 98
2. 96
3. 102
B. Find the total cost of the stock by answering each item. Write your answer on your
notebook.
No. of Stocks Market Price Broker’s Total Cost
Shares (php) Commission
85 AMDC Corp. 78.50 981.25 (4)
1000 Jack EMC Inc. 86.25 366.56 (5)
50 Premirica Corp 75.80 189.50 (6)
500 CC Inc. 125.00 3,125.00 (7)
40 King Trades Inc 312.25 624.50 (8)

C. Consider the listing on stock and answer the questions that follow:
Answer the questions that follow then write your answer on your notebook.
52 week
For number 9 -13.
HI LO STOCK DIV YLD% VOL(%) CLOSE NETCHG
16 12 HHH 0.9 1.1 1070 15.80 0.10

9. What was the lowest price of the stock for the last 52 weeks?
a. 12
b. 16

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 c. 1070
d. 15.80

10. What was the dividend per share last year?

a. 12
b. 16
c. 0.9
d. 15.80

11. What was the annual percentage yield last year?

a. 12
b. 1.1
c. .10
d. 16

12. What was the closing price in the last trading day?
a. 15.80
b. 16
c. 12
d. 1.1
13. What was the closing price the day before the last trading day?
a. 12
b. 16
c. 1070
d. 15.80

For 14 -16.
HI LO STOCK DIV YLD% VOL CLOSE NETCHG
(%)
34 23 KKK 1.7 1.75 1200 28 -3

14. What was the dividend per share last year?

a. 34
b. 23
c. 1.7
d. 1.75

15. What was the annual percentage yield last year?

a. 34
b. 23
c. 1.7
d. 1.75

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 16. What was the closing price in the last trading day?
a. 34
b. 28
c. 1.7
d. 1.75

Key Answer

What I know
1.b 7. c
2. c 8. a
3. d 9. a
4.d 10. b
5.c 11. d
6.a 12. a

What’s In
1. False 4. True
2. True 5. True
3. False
What’s More
For Stock AAA
1. Lowest Price = php 35.50
2. Dividend per Share = php .70
3. Closing Price = php 57.29
4. Closing Price (the day before the last day of trading) = php 57.29-0.10 = php 57.8
What Can I Do
1. Php 9,648.15 4. Php 6,284.25
2. Php 41,107.5 5. Php 20,606.2
3. Php 216, 300

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Assessment
A.
1. Php 980.00 3. Php 1,020
2. Php 960.00
B.
4. Php 5, 691.25 10. c
5. Php 85,883.44
6. Php 3,600.50 11. b
7. Php 59,355 12. a
8. Php 11,865.5 13. d
C. 14. c
9. a 15. d
16. b

References:

Leo Andrie A. Crisologo, et. al, Grade 11 General Mathematics Teacher’s Guide: Ground
Floor Bonifacio Building, DepEd Complex Meralco Avenue, Pasig City, Philippines
1600: Lexicon Press Inc.,2016, 222 - 229

Leo Andrie A. Crisologo, et. al, Grade 11 General Mathematics Learner’s Material: Ground
Floor Bonifacio Building, DepEd Complex Meralco Avenue, Pasig City, Philippines
1600: Lexicon Press Inc.,2016, 222 – 229

https://quickonomics.com/the-difference-between-bond-markets-and-stock-markets/

https://www.investopedia.com/ask/answers/09/difference-between-bond-stock-market.asp

https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/market-index/

https://youtube.be/f1Dx9lzyRUs

https://youtu.be/ngrgvVqs78Y

https://www.google.com/url?sa=i&url=https%3A%2F%2Fwww.slideteam.net%2Fcorporate-
emerging-stock-market-bonds-investment-risk-arrow-with-
icons.html&psig=AOvVaw00Gu1GtLikLwZ-

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STr_KfIj&ust=1595945576363000&source=images&cd=vfe&ved=0CA0QjhxqFwoTCJjTkurO7eoC
FQAAAAAdAAAAABAm

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