CAED102: FINANCIAL MARKETS

ACTIVITY #1: STOCK MARKET

Name: ____Xytus Anne B. Cortero________ Section: ___AC24_____

INSTRUCTIONS:
Answer the following questions and cite your corresponding source/s.

1. What is stock market? (1 pts)

Answer: The stock market refers to the collection of markets and exchanges where
regular activities of buying, selling, and issuance of shares of publicly-held companies
take place. Such financial activities are conducted through institutionalized formal
exchanges or over-the-counter (OTC) marketplaces which operate under a defined set of
regulations. There can be multiple stock trading venues in a country or a region which
allow transactions in stocks and other forms of securities.
Source/s: https://www.investopedia.com/terms/s/stockmarket.asp

2. How do you earn in stock market ? (2 pts)

Answer: Buy Low, Sell High. Needless to say, it’s important to estimate what a stock is
worth at market value. This way, investors will know whether it’s undervalued, inflated
or how the value would appreciate or depreciate. Once you determine the stock’s market
value, you can make clearer decisions based on movements from that reference point.
After that, you’ll need to establish the range at which you would purchase a stock. Once a
stock crosses that range, monitor it closely and check on the corporation’s stock historical
performance and don’t hesitate to pull the plug-in case things go awry.
Source/s: https://www.securitybank.com/blog/how-to-make-money-in-stocks/

3. What is PSE? (1 pts)

Answer: Philippine Stock Exchange
Source/s: http://fglinc.tripod.com/knowstockex.htm

4. What is PSEI? (1 pts)

Answer: Philippine Stock Exchange Composite Index
Source/s: https://capital.com/pse-index-psei-definition

5. What are the different sectors in PSE? (6 pts)

Answer:
 PSEi
 All Shares
 Financials
 Industrial
 Holding
 Services
 Mining and Oil
 Property
Source/s: https://www.jayceedeguzman.com/stock-market/what-are-the-sectors-in-the-
philippine-stock-exchange/

6. Differentiate fundamental from technical analysis? (4 pts)

Answer: Fundamental analysis is a method of evaluating securities by attempting to
measure the intrinsic value of a stock. Technical analysis differs from fundamental
analysis in that the stock's price and volume are the only inputs. Both methods are used
for researching and forecasting future trends in stock prices.
 Source/s: https://www.investopedia.com/ask/answers/difference-between-fundamental-and-
technical-analysis/#:~:text=Key%20Takeaways-,Fundamental%20analysis%20is%20a%20method
%20of%20evaluating%20securities%20by%20attempting,future%20trends%20in%20stock
%20prices.

7. What are the three (3) underlying assumptions in Technical Analysis? (3 points)
Answer: The field of technical analysis is based on three assumptions – the market
discounts everything, price moves in trends, history tends to repeat itself.
Source/s: https://www.tradingpedia.com/forex-trading-academy/introduction-to-technical-
analysis/#:~:text=The%20field%20of%20technical%20analysis,history%20tends%20to%20repeat
%20itself.

8. Differentiate Support from Resistance? (2 points)

Answer: Support occurs where a downtrend is expected to pause due to a concentration
of demand. Resistance occurs where an uptrend is expected to pause temporarily, due to
a concentration of supply.
Source/s: https://www.investopedia.com/trading/support-and-resistance-basics/

9. What is a Trend? What are the three types of Trends? (4 points)

Answer: A trend is the overall direction of a market or an asset's price. In technical
analysis, trends are identified by trendlines or price action that highlight when the price is
making higher swing highs and higher swing lows for an uptrend, or lower swing lows
and lower swing highs for a downtrend. The three basic types of trends are up, down, and
sideways.
Source/s:
https://www.investopedia.com/terms/t/trend.asp

https://www.investopedia.com/ask/answers/010715/what-are-differences-between-patterns-
andtrends.asp#:~:text=The%20three%20basic%20types%20of,up%2C%20down%2C%20and
%20sideways.

10. As a student, what do you think is the main benefit of learning stock market? (1 point)
Answer: I think the main benefit of learning stock market is helping students establish
strong and direct links with the real world economy, business, and government.